Do you understand your customers? V2

The purpose of this article.

  • Help the board of directors and C-Suite establish a common understanding of their cash paying customers and users. If your business model is a two sided market (e.g. Google would not have cash paying customers if there weren’t lots of free users of their search engine) you will need to understand both cash paying customers and users.
  • This article provides an overall framework.
  • This article applies to any business that depends upon cash-paying customers. This could range from:
    1. Early stage startups to long established global companies.
    2. Customers that are the general public to customers that are investors in investment funds.

You can download a PDF of this article from: Do you understand your customers V2

What are the critical learnings in this article?

  • If your company’s customer understanding is less than your competitors, your company will fail.
  • If your company’s customer understanding is out-of-date, your company fill fail.
  • If your company and your competitors have little customer understanding, your company’s survival depends upon luck.
  • Your need facts about how your customers perceive:
    1. Their urgent problems and needs.
    2. The financial and non-financial benefits they achieve from solving their urgent problems and needs.
    3. The benefits they are able to achieve from your solution vs the competition or status quo.
  • You must continuously learn from your customers via:
    1. Customer Advisory Board;
    2. Surveys;
    3. Focus groups; and
    4. One-on-one interviews.
  • Everyone in your company needs some understanding of your customers.

What is the process to understand your customers and users?

  • The eight-phase process is set out below.
  • The most critical part of the process is listening to what the customers and users are saying and observing what they are doing.
  • You start out by listing your assumptions.
  • Then you validate these assumptions via customer and user input.

Phase 1 Analyze third party market data.

  • What have been the historical trends?
  • What is the existing aggregate analysis of target segments e.g. geographic, social characteristics, demographic?

Phase 2 document your assumptions, whether or not you have existing cash paying customers and users.

Step 1: Define who your customers and users are.

  • Identify the key members of the customers’ ecosystem? Users are most common.  There can also be influencers, recommenders, blockers, etc. e.g. Google’s cash paying customers are advertisers.  Google would not have customers if there weren’t a large number of free users doing searches.
  • Who are your target customers and customer segments e.g. geographic, social characteristics, demographic?

Step 2 What does a day-in-the life of the customers and users look like?

  • What are the points of the day when they have urgent problems, pains, needs which your solution may be able to help with. Rank these in terms of intensity and frequency of occurrence.
  • What are the points of the day when they have problems or needs?  Rank the relevance in term of size of problem or need, and frequency of occurrence.
  • What value would the customer achieve as a result of solving problems or meeting needs? g. time saving, saving money, making more money, reducing frustration, increasing happiness, increasing social standing, etc.
  • At which points do they touch or become aware of your solution? These include: friends, colleagues, social media, conferences, publications, website, app, email, customer service, etc.
  • How do the customers and users perceive the value of your solution vs the current situation and competitors?

Step 3 What is the market size?

Market size requires customers who realize they have an urgent problem or need, are willing to spend money to solve it, and can afford to spend the money.

  • How many cash paying customers, and what would the revenue be, if you receive 100% of customer spending, regardless of distribution channels, and geographies?
  • How many cash paying customers, and what would be the revenue you receive 100% of customer spending, with your current distribution channels and partners?
  • What is your current market share? How many cash paying customers do you have, and what is the revenue? If you’re a startup, what are your assumptions for years 1,2,3?

Step 4 What is the customers decision making process and criteria?

  • There may be several sets of decisions. E.g. whether or not to seek a solution, whose solution to pick, whether or not to exit a solution provider to move to another solution provider.
  • There can be several roles involved (for customers who are individual consumers and for business customers). E.g. the decision by the person paying the cash, recommenders, influencers, etc.
  • What is the decision making process? Who is playing what role?
  • What are the criteria used by each person to assess: Is a solution required? Which solution should be selected? Should the current solution be exited and a new solution obtained?

Phase 3 Validate your assumptions by learning from your customers

You must learn from your customers:

  • What do they think are their urgent problems and needs?
  • What do they think are the financial and non-financial benefits of addressing their problems and needs?
  • How do they perceive the benefits they can achieve from your solution vs the competition or status quo?

You learn from your customers via:

  • Your Customer Advisory Board;
  • Surveys;
  • Focus groups; and
  • One-on-one interviews.

The qualitative data you collect will require thematic analysis.

Phase 4 Additional input if you have customers and users

The single most important question is asking  “Would you recommend our solution to others?”  This metric is known as NPS (Net Promoter Score)1.  Follow on questions could be “If so, why?  If not, why not”

A more detailed question would be: “How would you feel if you could no longer use our product or service?”2

  • Very disappointed?
  • Somewhat disappointed?
  • Not disappointed – it’s not really that useful?
  • I no longer use it.

At least 40% of your target customers must say “very disappointed”.  If it’s less than 40% you need to reposition/change your solution.  One approach can be to segment the answers to find a customer segment where the response is above 40%.

You must understand the group above 40%.  The 5 questions to ask them are: 1) who are you (demographically) 2) why did they seek out your product/service?  3) how are they using it 4) what is the key benefit 5) why is that benefit important?

Additional sources of customer input include:

  • Follow up emails after customer and user interaction, customer purchase, or customer/user exit.
  • Analysis of live chat discussions.
  • Analysis of sales call logs.
  • Analysis of app or website interaction.
  • Analysis of customers and users postings in social media, including review sites.
  • Survey kiosks at physical events.

Much of the customer input will require thematic analysis, because it will be qualitative and unstructured data.

Phase 5 Analysis of your company data

  • What % of customers and users do you lose each month?
  • What is the lifetime profit of a customer?
  • What is the customer acquisition cost?

Phase 6 Combine all of the above data

  • All of the above data may be combined and analyzed.
  • You’ll have both quantitative data and qualitative data. The qualitative data will require ethnographic analysis.
  • Different customer and user views include: by cohort, customer/user segment, geography, channel, partner, etc.

What is the value of all this data?

  • It helps you reduce customer acquisition costs, increase lifetime profitability of cash paying customers, attract customers more quickly, and reduce churn.

How do you achieve this value?

  • You prioritize your time and resources on what your customer would value, especially on the criteria which determine whether cash paying customers buy from you, your competitors, or remain with the status quo.
  • Your team has a common understanding of customers, which enables more effective decision making and execution.
  • Both your marketing and solution development are focused on enabling customers to achieve more benefits than the status quo or your competition.

Phase 7 Create customer persona for each target customer segment

What is a customer persona?

  • It is an easy to read, no more than one page, description of the key characteristics of a target customer segment. It is based on facts you have directly collected from customers and from third party research regarding C&U.
  • A persona is NOT hopes, dreams, wishes, personal opinion or individual anecdotes.

What is the value of a customer persona?

  • A persona helps everyone in the company (from the most junior to most senior) to easily have a common understanding of the customer.
  • Step 6 may produce a large volume of complex and hard to understand analysis.

How do you achieve this value?

  • You communicate the persona throughout the company, including the board of directors, C-suite, and advisory board.

What does a simple cash paying business customer persona look like?

  • The persona should be personal. Two aspects of the persona may be fictional: the photos and the names of the person.
  • You may have more than one persona for a target segment, but then consider whether you in fact have more than one target segment.
  • Remember that your cash paying customers may come from different backgrounds e.g. gender, race, etc.

What components could a simple cash paying customer business persona include:

  • Photos:
  • Name:
  • Business role: e.g. Head of marketing and sales. decision maker, recommender, influencer
  • Personal demographics : e.g. age 32-49, income: between $200,000 and $300,000 per year, Master degree, married with no children
  • Urgent business problems: company is losing customers, attracting few new customers, customer feed back is that “terrible service”
  • Criteria for making a decision: one hour meeting with the person leading and accountable for the solution. Building trust and connection with the advisor.

What could a complex cash paying customer persona look like?

  • Photos:
  • Personal background: age, marital status, number of children, education, location
  • Job role: reports to xx; manages yy: key performance metrics for role; skills and knowledge
  • Company or business unit information: industry, revenue, # of employees
  • Business goals: what does success look like for this person e.g. bonus and promotion? What are the urgent problems and needs? What are critical objectives in the person’s business plan? What criteria are used to assess a solution provider
  • What are personal goals and values: church volunteer, expedition travel, job security.

The Further Reading Section below has a link to an article with several examples of persona.

Phase 8 Continue the above 7 phases on an ongoing basis

  • Understanding customers and users is an ongoing process not a one-time event.
  • There are rapid and ongoing changes to: customer and user problems and needs, the competition, market sizes, regulation, the economy, new technology enable solutions, etc.

Your next steps

  • Customize the above 8 phases to your specific situation. For example, the process to understand investors in an investment fund will be different from end consumers deciding to buy a $10 product once a week.
  • Carry out the above 8 phases as quickly as possible. Don’t try to do a massive, 100% comprehensive and detailed effort. View this as a pilot, where you’re trying to get 80% of the value from 20% of the efforts. You might not even do all 8 phases nor every part of every phase.
  • Establish the ongoing process. If this is not ongoing, sooner or later you will not longer understand your customers, resulting in your company’s failure.
  • Assess the how much additional value could be achieved by improving the process. The best way to do this is via pilots and experiments.


1The Net Promoter Score concept was initially developed by Bain.  The following is a link to the Bain website homepage for Net Promoter Score, which contains several short articles:

The following is a quick overview of using Net Promoter Scores:



What further reading should you do?

Customer persona examples

 Talk with 100 customers before launch your company or start thinking about potential major changes.

Understand how your customers feel, by using a customer empathy map

Make a list of customers and potential customers to talk to.

What are your company’s decision making principles?

What is the purpose of this article?

Enable shareholders, the board of directors, C-Suite, and advisory board to discuss your company’s decision making principles.

You can download a PDF of this article from: What are your company’s decision making principles

What are the critical learnings in this article?

  • Decision making principles enable better decision making, resulting in faster growth and more profits.
  • Decision making principles are inter-related with your company’s: purpose; values, morals, and ethics; value creation; and corporate governance.

What is the purpose of decision making principles?

  • Principles are the guidelines within which people make decisions. If rapidly growing or large companies have centralized decision making for every decision, the result is slow moving paralysis. If people in the company make any decision they feel like, the result chaos.
  • Successful employee empowerment depends upon principles.
  • Decision making principles enable better decision making.

What is the context for decision making principles?

There are five aligned and inter-related sets of concepts:

  • What is the purpose of your company?
  • What are your company’s values, morals, and ethics?
  • How does your company create value?
  • What is corporate governance?
  • What are your company’s decision making principles?

What are four examples of decision making principles?

The number and type of principles are unique to each company at a specific point in time.

#1The founder and CEO of a global transaction company had one simple principle. Keep customer application latency below xx milliseconds. If latency increased beyond this point, the company would quickly lose customers, regardless of any additional functionality.

#2 Staples was founded in 1986 with three core principles:1

  • Provide a one-stop shop for all of the products consumed in the office.
  • Offer everything at half price.
  • Provide a convenient place to shop.

#3 Tim Cook, early 2009 on a conference call with analysts, shortly after Steve Jobs went on a medical leave.

“We believe that we are on the face of the earth to make great products, and that’s not changing. We are constantly focused on innovating. We believe in the simple not the complex. We believe that we need to own and control the primary technologies behind the products that we make, and participate only in markets where we can make a significant contribution. We believe in saying no to thousands of projects, that that we can really focus on the few that are truly important and meaningful to us.  We believe in deep collaboration and cross-pollination of our groups which allow us to innovate in a way that others cannot. And frankly, we don’t settle for anything less than excellence in every group in the company, and we have the self-honesty to admit when we’re wrong and the courage to change.  And I think, regardless of who is in what job, those values are so embedded in this company that Apple will do extremely well.”2

#4 Ray Dalio (Founder of Bridgewater Associates, an investment firm with $150 billion (USD) in assets.  Ray’s personal wealth is estimated at $15.6 billion (USD)) wrote a 540 page book filled with his life and business principles.3

What are your next steps?

  • Review your existing documentation regarding: the purpose of your company; your company’s values, morals, and ethics; how your company creates value: your current corporate governance structure; and any existing decision making principles.
  • Interview and survey members of your company’s ecosystem to assess the degree to which your documentation reflects current reality.
  • Assess the degree of alignment among: purpose; values, morals, and ethics; value creation; corporate governance; and any existing decision making principles.
  • What are the differences between the perceptions of the ecosystem members and your company’s documentation?
  • What are the ecosystem member perceptions in the cases where your company has no documentation?
  • Analyze the above, including by ecosystem member.
  • What are the implications for your company?
  • Determine what improvements need to be made to the behaviour of your employees (this includes board of directors, CEO, C-Suite, every employee, and contractors)
  • Determine where a principle (or a few principles) could have the greatest impact on: achieving purpose; enabling moral, values, and ethics; and growing value.
  • Some possible areas which could have a major impact on value could include: selection and exiting of board directors; selection and exiting of CEO and C-Suite; the experience cash-paying customers and users have when interacting with your company; making strategic decisions; etc.


1 David G. Thomson,  Master the 7 essentials of high growth companies, (Hoboken, New Jersey, 2010) John Wiley & Sons, Page 174

2 Walter Isaacson, Steve Jobs, (New York, 2011), Simon & Schuster, Page 488

3 Ray Dalio, Principles,  (New York, 2017), Simon & Schuster

What further reading should you do?

What is the purpose of your company?

Why are morals, values, and ethics important?

How does your company create value?

What is corporate governance?

What is different about family governance? V2

What is the purpose of this article?

  • Enable the family to discuss their overall governance structure, including the purpose of the family and family governance.
  • The article identifies potential components of family governance.
  • This article is focused on what to do, not how to do it. There is no advice on how to structure governance for your specific family situation.

You can download a PDF of this article from:  What is different about family governance V2

 What are the critical learnings in this article?

  • Wealth management is only a small part of family governance.
  • Purpose, legacy, values, morals, and ethics are the foundation of family governance.

What is family governance?

Family governance involves a set of relationships among: family members, family components such as family holding company, the family office, and other family ecosystem components.  Family governance also provides the structure through which: the shared values and objectives of the family are set, the objectives of the family components are set, and the means of attaining those objectives and monitoring performance are determined.

Based on the above definition, there are four aspects to corporate governance:

  • The focus is on relationships among different people and groups of people,
  • Setting values and objectives. People determine values and set objectives.  People have different interests and personal values and objectives.  The conflicts of interest need to be understood and managed to agree upon some shared values and objectives.
  • Determining how to achieve values and objectives. People have to develop plans which reflect what they will do to achieve the values and objectives.
  • Monitoring performance. The performance of people is monitored. Everyone needs to understand the personal consequences of not achieving values and objectives.

What is the purpose of governance?

Governance is the mechanism by which the purpose, values, and objectives of the family are achieved.

A critical challenge of family governance is understanding and managing the broad range of conflicts of interest.

What are the components comprising family governance?

#1 What is the purpose of the family?

Why does the family exist?  Is it to provide a certain lifestyle for certain family members?  Is to enable wealth transfer to future generations? What benefit to communities and society, if any, should the family provide?  What constraints or negative impact to communities and society should the family be committed to, if any?  The purpose of the family is intimately tied to the values, morals, and ethics of the family.

What is the definition of a family member? Who may, or may not, be a family member?  This can become complex, as people marry, divorce, have common-law relationship, have children outside of any formal relationship, as children are adopted, etc.

The greatest legacy for the founder(s) is to be able to see that memory, legacy and values will carry on through a family which remains joined. Family governance is critical to this.

#2 What is the purpose of the Family Constitution document?

The family constitution includes:

  • The values, morals, and ethics of the founder(s).
  • Other values.
  • What the family members can expect from the family businesses and investments.
  • Employment policy regarding family members in family businesses.
  • The overall family governance structure, e.g. family assembly, family council, etc.
  • Who is a family member and who attends the Family Assembly i.e. spouses and partner or only direct descendants. At what age do children start to attend and participate in the Family Assembly.

There can be additional policy documents, approved by the family council, but not part of the constitution e.g. investment policy, philanthropy guidelines.

The family constitution should be signed by each family member.

#3 What is the Family Council

  • It is the family council that helps bind the family across generations, by emotional bonding. Trusts and other legal documents alone will not be successful in keeping the family together.
  • The family council: engages the family; resolves issues (there can be angry and passionate disputes); celebrates the family; starts the education of future generations; and enables blunt discussion about the future and the policies embedded in the family constitution.
  • Articulating and gaining commitment to a common understanding of the legacy, shared vision, identity, values, and purpose.
  • Managing the transition from controlling founder(s) to subsequent generations. Ideally the new governance is in place in time for the founder(s) to see that it is working, and to be comfortable that the family will continue to be bound together in future.
  • Resolving family differences, which are often emotional and based on different perceptions.
  • The family council may enable a once-a-year family assembly where all members of the family come together. There, the family council provides an update as well as learns the views and preferences of the entire family. This can be an opportunity to build (or destroy) trust between the council and the family, as well as among the family.
  • The family council may represent different branches of the family.
  • The family council provides the legacy, emotional, and policy context for family philanthropic activities, including family foundation(s).
  • The family office provides the support required, and daily management of family council activities.

#4 What is the Family Investment Committee

  • The family investment committee recommends the investment policies which direct the investment activities of all the entities falling within the family governance structure. The investment policy is approved by the Family Council.
  • The investment policy is designed knowing that there can be swings in asset valuations and asset liquidity.
  • The investment policy also needs to consider the degree to which different family members depend upon income from the family assets.

#5 What is the purpose of a Family Holding Company (or companies)?

  • Having a wide range of family assets under a single governance structure, with a single board of directors.
  • Decisions regarding asset management reflect the overall direction of the family, rather than individual family members.
  • Enabling generational wealth transfer.

#6 What is the purpose of Family Trust?

  • Shielding assets from creditor claims.
  • Avoiding the probate process.
  • Avoiding legal challenges to asset dispersal.
  • Enabling generational wealth transfer.

#7 What is the purpose of the family foundation (or foundations)

  • It helps bind family members, providing continuity of family values, and illustrating there is more to the family than growing and sharing wealth.
  • Family members on the foundation board(s) can actively participate, and make a contribution to the family. The guidelines and policies guiding the foundation(s) are set by the family council.

#6 What is the purpose of a Family Bank (or other family controlled financial institutions?)

  • Provide finance and financial tools for family members and family controlled assets.

#8 What is the purpose of the family office

  • Supports the family members and family components with the day-to-day administration and management of the family’s affairs.
  • The services provided by a family office may include: asset management (this may include homes around the world, planes, yachts), cash management, risk management, financial planning, tax, accounting, travel arrangements, school arrangements, insurance, personal and property security, data security, vetting of employees and contractors, hostage & ransom negation, etc. The family office will depend upon third party service providers.

#9 What is the purpose of the Family Assembly?

  • Create emotional bonds between family members who may not otherwise meet frequently.
  • Provide non-binding feedback to the Family Council.
  • Provide training and education e.g. estate planning, taxes, etc.
  • Identify future leaders e.g. potential Family Council members.

What are the biggest challenges faced by family governance?

  • The family losing its understanding and commitment to long-term vision, identity, values, and purpose. This is a challenge as the family grows in size over the generations.  The family council and family office are key to helping new family members understand and commit to the non-financial legacy.
  • Gradually revising the shared vision, identity, values, and purpose over the generations. What was appropriate 50 years ago may not be appropriate 50 years from now.  Managing the desire for continuity with the need for change, which can result in passionate disagreements.  The legacy is not forgotten but actually evolves.
  • Family conflicts can easily arise, especially with multiple branches and multiple generations. A key issue can be the decisions around growing the family’s wealth vs distributing the family’s wealth.
  • The leaders find it hard to “let go”. The founder(s) may have built their wealth, based on being the decision-maker(s).  But to have a successful legacy, the founder(s) should transition to, and see, a new governance model in place.  The same challenges apply to the CEO of the family office (who should be a non-family member), as well as chair of the family council.  Thus, the succession planning for these two roles is critical and different from what one would see in traditional corporate governance.
  • The family wealth could suffer dilution or shrinkage due to high expenses, poor tax planning, or distributions to the current generation of family members. It can be difficult for individuals to defer immediate spending in order for wealth to be available for the next generation. It is key to build in the concept of “stewardship” – that the wealth is being passed onto the current generation, who must ensure that wealth is also passed onto the next generation.  The stewardship also applies to all the non-financial aspects which have been identified.
  • Entitlement is often an issue. Young family members may grow up with wealth and feel entitled as they become adults.  The family constitution should have principles around this.  As Warren Buffet said “Give each child enough money so that they can do anything, but not so much that they can do nothing”.  This approach to guidance as to how parents raise their children, can be a source of family conflict.
  • Intense and transparent communication with the family. If the family does not know what is happening, the family will not care. And without the emotional commitment arising from caring, the family will dissolve.
  • The subsequent generations attempt to run the family and business the same way the founder did (i.e. the family makes many investment and business decisions). The founder(s) have been successful this way.  The facts show that family businesses with majority of independent directors outperform the average public company (except in health care and financial services).  This can be a source of family conflict when subsequent generations believe they are just as competent, if not more competent, than the founder(s).

What are your next steps:

  • Determine which components of family governance apply to your situation, taking the amount of your wealth into consideration.
  • Perhaps all that is appropriate is have a will and powers of attorney and discussed those with your heirs and trustees. Even in this case, you’ll need to consider whether step-children and step-grandchildren should be heirs.
  • Perhaps there are more components of family governance you need to execute, but you’ll do it yourself.
  • Perhaps you need third parties to manage your wealth and the related financial management e.g. tax planning
  • Perhaps you need to execute all components of family governance, given the size of your wealth, as well as your legacy wishes. This will require third party help to create and manage your multi-generational governance structure.

What further reading should you do?

Why are values, morals, and ethics important?

Help support the Geoff Carr Fellowship at Lupus Ontario

My annual fundraising campaign for Lupus Ontario is underway.  Over the past 16 years, family, friends, neighbours and colleagues have contributed over $248,000.

 Why am I fundraising?

My daughter was diagnosed with lupus in 1996, and we have personally experienced the challenges of this complicated disease.

 How does your donation help improve the lives of people living with lupus?

100% of the funds we raise are being directed towards the $65,000 Lupus Ontario Geoff Carr Fellowship. This Fellowship is offered annually to a qualified doctor to work under supervision at an accredited Lupus Clinic in Ontario.

The Fellowship also provides the recipient opportunities to conduct research in either adult or paediatric lupus, to gain additional in-depth knowledge of diagnosis and treatment options for the disease, and to provide patient care and education.

 For more information and to make a secure financial on-line donation, visit my fundraising page:

Stay safe.  Stay well.


How will startups destroy you company?

What is the purpose of this article?

  • Help startup founders understand what’s necessary to destroy incumbents.
  • Help incumbent board of directors, CEO, C-Suite, and investors to understand what must change to both survive attacks by startups and to destroy established competitors.

You can download a PDF of this article from:  How will startups destroy your company

What are the critical learnings?

  • Founders have current and relevant knowledge and experience vs your company leaders having obsolete knowledge and experience.
  • Founders learn and unlearn faster than your company’s leaders.
  • Founders have a better ongoing understanding of customers (what their urgent problems and needs are, how they perceive value, how they make buying decisions, etc.) than your company’s leaders.
  • Founders make quicker decisions with better decision making processes than your company’s leaders.
  • Capital is unlimited these days. What is extremely scarce is leadership talent able to identify large numbers of customers with urgent problems they are willing and able to pay for.

Where is your company today?

  • Your company is a large, well established incumbent.
  • Your company is not in crisis.
  • Revenues and sales have been growing yearly and are forecast to continue to grow.
  • Your board of directors is well compensated.
  • Your C-Suite is well compensated.
  • Your board of directors and C-Suite agree that everything is going well and that there is no need to make any major changes to the board, the C-Suite, or the company’s business model.

How fast can your company end up in crisis?

  • Your company can go from double digit CAGR to negative CAGR within 3 years.1
  • Even country empires can fall within 5 years e.g. France in 1700, The Ottaman Empire in early 1900’s,. the Soviet Union in the late 1900s. 2
  • Blackberry was the cell phone leader in 2007. The iPhone was announced in 2007.  In 2008, the iPhone unit sales already exceeded Blackberry unit sales.

Will your company survive crisis?

At any given moment, 5-7% of incumbents are in free fall.  Free fall occurs when a mature incumbent comes under severe attack by new insurgents.  Only 10%-15% of companies ever pull out of free fall. 3

What’s the approach used by startups to attack your company?

Focus on creating value for C&U (Cash paying customers and users)

  • Develop deep and ongoing understanding of C&U problems and needs.
  • Develop deep and ongoing understanding of the value C&U obtain from addressing each component of their problem.
  • Focus on determining and identifying large numbers of customers with problems they are willing and able to address.
  • Constantly monitor whether or not customers and users perceive that they are obtaining value.
  • Understand why existing C&U are recommending or not recommending the startup.
  • Understand how C&U perceive the startup relative to your company.
  • Understand how C&U perceive the startup through the entire life item of the C&U relationship: marketing, sales, onboarding, product and service delivery, CU& support, and exiting.
  • Understand how and why customers decide to purchase or to exit. Understand how customers assess potential suppliers.

CEO and C-Suite Talent

  • Clear about the purpose of the startup – why does and must the startup exist. Understanding why now is the right time.
  • Each startup employee has a major impact on value creation.
  • Able to learn and unlearn quickly. E.g. The founders of the majority of unicorns (startups which achieved a $1billion valuation) had no previous domain experience.4 Roche paid $1.9 billion US for Flatiron Health, a cancer electronic records company. The Flatiron founders (Nad Turner and Zach Weinberg ) had no background in cancer. They came from advertising.5
  • Constantly experimenting with customers and creating new business models ahead of your company.
  • Able to fundamentally change direction based on solving urgent problems of customers willing and able to spend money. g. YouTube started as an online dating site, and Slack started out as an online gaming platform.6
  • Able to attract and create ongoing relationships with a broad range of talent: cash paying customers, employees, advisors, investors, etc.
  • Faster decision making than your company and better decision making processes.
  • Quickly re-allocating people and capital to what most impacts value creation.

The availability of unlimited capital and global talent.

  • Once a startup demonstrates that there are a large number of customers with urgent problems they are willing and able to pay for – there is unlimited global capital to fund rapid growth as long as the long term profitability of customers exceeds customer acquisition costs. Growth is not constrained by short-term profits.
  • The startup can from day one draw upon talent on a global basis. Even in the pre-COVID days, I was surprised that startups with a handful of staff were already operating globally with global staff.

The behaviour of everyone in the company

  • Everyone in your company can understand and relate to the purpose of the company. I love the story of when President Kennedy visited NASA and asked a janitor sweeping the floor why the janitor was working so late.  The janitor supposedly said: “I’m helping put a man on the moon.”
  • Leaders never criticize those who bring forth unpleasant realities.
  • People bring data, evidence, logic, and analysis to discussion.
  • Think and act with calm determination.
  • Leaders have a high question to answers ratio, challenging people and pushing for insight.
  • Team members unite behind a decision, even if they disagree with it.
  • Team members credit others for success yet also has the confidence and admiration of peers.
  • Team members argue and debate to find the best overall answers.

What are your next steps?

  • Assess and improve the ongoing process for your leaders to understand your customers and users.
  • Ensure your leaders are aware of global startups which could threaten your company.
  • Define the requirements for your leaders current, relevant knowledge, experience, skills, and networks. Assess your leaders relative to requirements and the competition. Begin this assess with the board of directors and C-Suite.


1 Chris Zook and Charles Allen, The founders mentality, 2016, Page 52

2 Chris Zook and Charles Allen, The founders mentality, 2016, Page 106

3 Chris Zook and Charles Allen, The founders mentality, 2016, Page 51

4 Ali Tamaseb, Super Founders, New York, New York , Hatchette Book Group, 2021, page 267

5 Ali Tamaseb, Super Founders, New York, New York , Hatchette Book Group, 2021, page 252

6 Ali Tamaseb, Super Founders, New York, New York , Hatchette Book Group, 2021, page 267

What further reading should you do?

Do you understand your customers?

Why is learning critical for your company’s success?

What are the three types of talent successful company’s require?

Is your company planning to fail?

How do you make strategic decisions?

In August 2021, I became an advisor at the Holt Accelerator.

Holt is focused on startups in Fintech i.e startups whose cash paying customers would be in financial services. There are 27 portfolio company investments in 10 countries. Holt Accelerator is supported by Holdun, a family office with over a century of investment experience. The Holdun Family Office is an award-winning multi-family office with branches in Canada, United States, and the Caribbean.

The following is link to the Holt Accelerator website:

Why is learning critical to your company’s success? V2

What it the purpose of this article?

Enable founders, CEOs, boards of directors, C-suite, and investors to discuss what people need to learn and how to learn. The focus is on your company’s value creation plan.  The concepts also apply to all other parts of your company.

You can download a PDF of this article from: Why is learning critical to your company’s success V2

 What are the critical learnings in this article?

  • Facts, assumptions, knowledge, experience, and skills are rapidly becoming out-of-date.
  • Making and executing decisions based on out-of-date facts, assumptions, knowledge, experience, and skills often leads to company failure – be it a startup or long-established global company.
  • The challenges are: leaders (e.g. board directors, C-Suite) not wanting to learn and/or unable to learn, determining what to unlearn and learn, as well as how to learn.

 Why focus on learning?

The inability to learn is the root cause of many companies failing. “The assumptions on which the organization has been built and is being run no longer fit reality.”1  This is true whether you are a pre-revenue startup or a long-established global company.

Why are assumptions critical?

All forecasts and plans are based on assumptions.  It is impossible to predict with 100% accuracy what will happen in the future and what the results will be from your decisions and actions.

It’s getting harder to make appropriate assumptions about the future because your company’s ecosystem will be getting more complex, the interactions between ecosystem members will be getting more complex, and changes will be occurring more rapidly to both your ecosystem members and the nature of their interactions.

Past results also often reflect assumptions rather than facts.  For example:

  • Did a good result occur due to good talent and good process OR was poor talent and poor process lucky?
  • Why didn’t customers buy your solution? Did you ask your customers?  Did they tell you the complete truthful explanation?
  • The interaction of your companies ecosystem members was complex. Hard to actually determine what the cause and effects were. Did your analysis reveal correlation rather than cause and effect? Correlation could lead some one to say “cancer causes smoking.”
  • Did you identify the past critical assumptions for success?

How fast is knowledge growing?

In 1982, futurist and inventor R. Buckminster Fuller estimated that up until 1900, human knowledge doubled approximately every century, but by 1945 it was doubling every 25 years. In 2020 it was doubling every 12-13 months.2

How do you know if your knowledge is out-of-date?3

Knowledge becomes out of date and decays.  The rate of decay varies by the specific area.  Just as the amount of knowledge is rapidly increasing, the amount of obsolete knowledge is rapidly increasing. Your decisions and actions must be based on the current situation, not on what existed a few years ago.  Your decisions should not be based on hopes, dreams, unvalidated assumptions, and missing or incorrect facts.

What is learning?

“Learning is about acquiring diverse, rare, and valuable chunks of knowledge through people, information, and experiences.”4  Learning must result in value.  You need both diverse and in-depth areas of learning, which will change over time.  Learning is far more than facts and data.  New mental models, frameworks, paradigm, and ways of thinking are all part of learning.

Are company learning efforts effective?

Most companies fail to help their employees learn.

  • 70% of employee report they do not have mastery of the skills needed to do their jobs. Only 25% of respondents believe training measurably improved performance. Only 12% of employees apply the new skills they learn in leadership and development programs to their jobs.5
  • 7% of the leaders polled by a UK business school think their companies develop global leaders effectively.6

What are the challenges to learning?

  • Knowing what to learn and what questions you need to answer. McKinsey states that the first step in strategy is asking “What are the right questions?”7  Are you focused on the right problem? Albert Einstein supposedly said “If I had only one hour to save the world, I would spend fifty-five minutes defining the problem, and only five minutes finding the solution.”
  • If people do not apply what they learn, they will forget 42% after 20 minutes, and 75% after 6 days. 8
  • You need to unlearn obsolete knowledge.9
  • Finding the relevant knowledge to be able to address your problems.
  • Being able to filter out the ever-increasing amount of mis-information.
  • Finding the right people with the appropriate knowledge.
  • Learning at the wrong time. You learn best when you have to learn what is needed immediately.
  • Learning the wrong things. Learning what has limited impact on performance and value creation.
  • You don’t have the ability or desire to learn new: mental models, paradigms, or areas of deep expertise.

What areas do you need to learn about?

The following are some of the areas:

  • Understanding the members of your company’s ecosystem. For example, customers: what are the cash paying customers urgent problems and needs for which they are willing and able to pay to solve? How may of these customers are there?
  • Understanding how the ecosystem members interact and impact each other. For example, pressure from various members can result in shareholders voting in board members who are focused on dealing with climate change.
  • What are possible future scenarios and trends, and how will they be different from the past?
  • What are the talent capabilities required to make decisions regarding the company’s competitively differentiated value creation plan?
  • What are the appropriate decision-making processes? Strategic decision making, tactical decision making, and day to day decision making processes are much different.

Some of what you need to learn includes: facts, knowledge, mental frameworks, paradigms, skills, processes, and analytical techniques.

How do you learn?

The key principle of learning is to learn and apply the learning at the time you need it.  This can be done in many ways:

  • Coaches and mentors helping you to address your problems and needs. These coaches and mentors could include colleagues and external advisors. You may have to pay your external advisors for timely access. The value of learning is reduced if you have to wait days or weeks to address your issues.
  • Formal education at which you work through your specific problems and needs.
  • Micro-courses (a few minutes to an hour) to immediately help when you have a problem or need.
  • Online help systems to provide you with immediate answers.
  • Reaching out to experts in your network, both paid and unpaid.

Use the Feynman Technique10

This technique was developed by Richard Feynman, Nobel Laurate Physicist.

  • Write down what you know about the problem or need. This includes facts and assumption.
  • Be able to teach it to a child. Use plain simple words, without acronyms and complex terminology. If you have difficulty in making this short and simple, then your have the opportunity to improve your understanding.
  • Identify what you don’t know. You may not know what you don’t know. Your research may involve contacting others as well as reading.
  • Organize what you’ve learned into a story with simple sentences and analogies. Tell the story of your learning out loud.

Richard Feynman’s example of how to explain what the universe is made of to grade 7,8,9 students. “All things are made of atoms – little particles that move around in perpetual motion, attracting each other when they are a little distance apart, but repelling upon being squeezed into each other”.

Write notes out by hand, not typing into a phone, tablet, or notebook.11

  • Understanding and the ability to apply learnings requires note taking. Take notes whenever you want to lean: e.g. meeting or interviewing people, attending seminars.
  • Research has shown that hand taken notes result in deeper understanding and improved ability to apply the learning, compared to typed notes. Typed notes are usually much longer than hand taken notes.
  • The research hypothesis is that hand taken notes require your brain to think about what you’re seeing and hearing, and to synthesis and process your learning.

What are your next steps?

You must develop a learning plan for your specific situation, be it yourself or your entire company.

  • Document the historical results of your company’s value creation plan?
  • Analyze the historical value creation results? Compare the historical results compare to the competition. List your findings.
  • Document the current talent capabilities and process for making decisions regarding your value creation plan.
  • Define the changes you need to make to the talent and process based on what you’ve learned from: your historical analysis and from others.
  • Create your learning plan for your decision makers. Who needs to learn what and how they will learn.
  • Establish a learning performance monitoring process to address questions such as: how well are individual leaders learning? What is the impact of their learning?


1 Perter F. Drucker, “The Theory of the Business,”, Harvard Business Review,1994 September-October issue,

2 Michael Richey, PhD, Chief Learning Scientist, The Boing Company, “Future Systems of Learning and Knowledge Development: Human Capital, Sociotechnical Systems and the flow of Information“, SRI International,


4 Michael Simmons, “The No. 1 Lifelong Habit of Warren Buffett: The 5-Hour Rule”, Medium,

5 Steve Glaveski , “Where companies go wrong with learning and development” Harvard Business Review Oct 2, 2019

6 Pierre Gurdjian, Thomas Halbeisen, and Kevin Lane, Why leadership development programs fail McKinsey Quarterly Jan 1, 21014

7 Chris Bradley, Angus Dawson, and Antoine Montart, “Mastering the building blocks of strategy”, McKinsey, October 2013 article

8 Steve Glaveski, “Where companies go wrong with learning and development”, Harvard Business Review Oct 2, 2019

9 Mark Bonchek  , Why the problem with learning is unlearning. Harvard Business Review November 3, 2016

10  Taylor Pipes, “Learning from the Feynman Technique”, Medium, August 4, 2017

11 Cindi May, “A learning secret: don’t take notes with a laptop”, Scientific American , June 3, 2014

What further reading should you do?

The seven essential elements of a life-long learning mindset

Jacqueline Brassey, Nick van Dam, and Katie Coates McKinsey Feb 19, 2019

How do you grow your company’s value?

Is your company  planning to fail?

How do you make strategic decisions?

What is the purpose of this article?

Enable founders, C-Suite, the board of directors, and investors to discuss the talent and process required to make strategic decisions.

You can download a PDF of this article from: How do you make strategic decisions

What are the critical learnings in this article?

  • Make sure you are addressing the right problem before starting the decision-making process.
  • Determine if the problem and decision are tactical vs strategic.
  • There are different types of strategic decisions with different approaches.

Strategic decision making is flawed in most organizations1

A McKinsey survey of executives regarding the quality of their strategic decisions revealed that:1

  • Only 28% thought good strategic decisions were frequent;
  • 12% thought good strategic decisions were infrequent; and
  • 60% thought bad strategic decisions were as frequent as good strategic decisions.

What has the greatest impact on company performance? McKinsey found that it was the quality of the decision-making process. The % of company performance improvement due to:

  • Quality of the decision-making process: 53%
  • Industry/company characteristics: (e.g. consumer tastes, implementation resource capability) 39%
  • Quality and detail of analysis: 8%

What is a strategic decision?

A strategic decision has major impact on the long-term value of the company.  It may even be a “Bet the company decision”. A strategic decision often has uncertainty in costs and benefits, a long-term future which may change, and a dependence on simultaneous outcomes.  Most company decisions are tactical, with limited impact on long-term value. The short-term  future is clear, costs and benefits are known.

What are some examples of a strategic decision?

The following is a partial list:

  • Nominating a board director. Board directors may have the greatest impact on long-term value, given that the appoint and terminate the CEO, approve strategies, plans, and policies. Directors have the ultimate accountability for company performance.
  • The appointment or termination of a CEO.
  • Selling the company.
  • Transforming the company.

Can you actually predict the future?

There are four types of forecasts.

  • There is a single path to a specific outcome.
  • There are a small number of specific scenarios.
  • There is a defined range of scenarios.
  • The unknown – it’s not possible to even define a range of future scenarios.

Is your strategic decision focused on the right problem?

Albert Einstein supposedly said “If I had only one hour to save the world, I would spend fifty-five minutes defining the problem, and only five minutes finding the solution.” An adequate solution to the right problem is far better than a terrific solution to the wrong problem. Before looking for the best solution, make sure you’re focused on the right problem.

  • What is the basic need or opportunity? What is the scope of the problem?  Who in your company’s ecosystem is impacted?
  • What are the constraints: external (e.g. laws, public opinion, etc.) and internal (e.g. capabilities of your talent, including past experience, the ability to personally transform by learning fundamentally new skills and behaviours)?
  • What requirements must the solution meet?
  • What are the expected outcomes? What value is created or destroyed for the members of your company’s ecosystem?
  • Are the outcomes consistent with your company’s purpose, values, morals, and ethics?
  • How will you measure the outcomes?

 What are the four types of strategic decisions?

  • Proven historical success in your company. An example would be a company that has done dozens of acquisitions successfully and is very likely to make the right acquisition decision.
  • Proven historical success in other companies, but have not been made before in your company, or was made unsuccessfully. An example is an acquisition decision, which has been made countless times in countless companies.
  • A unique decision that has not occurred before externally or within your company, and unlikely to occur again. An example was the decision making regarding the Year 2000 software issue – never happened before and will never happen again. Your company must draw upon people with proven experience with developing solutions to unique problems. There are no: people with prior experience, processes, policies, etc. There is little value to your company in building a long-term team, documenting processes, etc.
  • A unique decision that has not occurred before externally or within your company, but likely to occur again within your company. Your company must draw upon people with proven experience with developing solutions to unique problems. There are no: people with prior experience, processes, policies, etc. Your company must: build a pool of talented people, document the processes and policies, etc.

What is the approach to each of the four types of strategic decision?

  • If your company has successfully addressed this problem in the past, what have you learned? Draw upon the people in your company with past experience and utilize documented processes, policies, etc.
  • If your company has tried and failed to successfully address this problem in the past what have you learned? Your company can draw upon external: people with experience, processes, policies, etc. If your company expects to make these decisions in future, you must: build a pool of talented people, document the processes and policies, etc. The challenge is that often the outcome is not successful, even with outside experts.
  • If the problem has never occurred before and never will occur again, what are the capabilities of the people needed to understand the problem and develop a solution?
  • If the problem has never occurred before but likely will occur again, what are the capabilities of the people needed to understand the problem and develop a solution? How will your company learn from this experience? How will your company retain the learnings, both in the experienced talent and documented knowledge?

Are your able to assess the effectiveness of past strategic decisions?

  • Was success due to the right process and people OR were the wrong people with the wrong process lucky?
  • Was failure due to the wrong process and people OR were the right people and process unlucky?

What has been the past impact of your strategic decisions?

Let’s use the example of board director selection and exiting for companies without a controlling CEO or shareholder.

  • What has been the impact on long-term value in the past 10 years?
  • How does this compare to other companies in your market place?
  • Is your company in the top quartile or bottom quartile?
  • If your are in the bottom quartile, determine whether your board director selection, development, exiting process need improvement of if the board decision making process needs improvement.

How do you know you are going to achieve benefits from your strategic decision?

  • I’ve heard countless consultants say “We developed a great strategy but the company was unable to implement.”
  • Will your company be able to successfully implement your strategic decision?
  • Has your company identified the talent, skills, experience, partnerships, capital, and other resources needed to achieve benefits?
  • If your company doesn’t have all the required resources, how likely is it that your company can acquire them?

Have you identified the decision making and implementation biases people have, and taken action to mitigate them?

Biases include:

  • Confirmation bias: people favour information that supports existing beliefs.
  • Conformity bias: people will go along with what the majority of the group believes.
  • Authority bias: people support what the authority figure believes. The most senior person may not be the authority figure.
  • Loss-aversion: Sticking to a decision, if the facts and assumptions have changed. People have an emotional attachment to a decision they have made.
  • etc.

What are your next steps?

  • Assemble the team to determine or validate what the problem is.
  • Assign one person whose sole focus is taking mitigating actions to address the biases of the decision-making team. This may be an external advisor, given that that bias identification and mitigation can lead to inter-personal challenges and require coaching of the decision-making team.
  • Determine whether you are making a strategic decision to address a strategic problem, or if this is tactical.
  • Identify what type of strategic decision you are making.
  • Review the facts and assumptions regarding the past effectiveness of the decision-making approach. What are the lessons learned in terms of what enables success and what leads to failure. Remember that luck often plays a role.
  • Identify the internal and external talent required for the strategic decision.
  • Review and revise the decision-making process. You may have to create a process if the decision has never before been inside or outside of you company.


1 “The case for behavioural strategy”, McKinsey Quarterly 2010, Number 2

What further reading should you do?

Few companies make decisions leading to long-term value creation.

Successful companies need external talent, just like Olympic champions do.

Traditional strategic planning dooms companies to failure.

What is corporate governance? V2

What is the purpose of this article?

The purpose of this document is to enable founders, CEOs, management, investors, shareholders, board of directors, and advisory boards to create a shared understand of their company’s corporate governance.

This article does not provide legal advice.

You can download a PDF of this article from: What is corporate governance V2

 What are the critical learnings in this article?

The value growth of your company will be hindered if decisions and actions are based on conflicting perspectives regarding: the definition of corporate governance, the purpose of corporate governance, and the company’s values, morals, and ethics.

What is corporate governance?

“Corporate governance involves a set of relationships between a company’s management, its board, its shareholders and members of the company’s ecosystem.  Corporate governance also provides the structure through which the objectives of the company are set, and the means of attaining those objectives and monitoring performance are determined. “1

This definition has 4 components:

  • Relationships among the company’s ecosystem members.
  • Decision making i.e. setting objectives and approving action plans.
  • Action plans i.e. means of attaining those objectives.
  • Performance monitoring of the objectives, action plans, relationships.

The members of the corporation’s ecosystem make assumptions regarding the corporation’s purpose, values, morals, and ethics based upon observations of: the nature of their relationships, decisions made, and impact of the action plans.

What are the challenges of understanding corporate governance.

Discussion around governance is often very silo based and depends upon the specific background of the governance advisor e.g.

  • Lawyers often start with the Business Corporations Act. Sometimes the legal framework is a social purpose corporation, such as a B Corp., a partnership or a joint venture.
  • Regulators often start with financial risk management guidelines.
  • Accountants often start with quality of financial statements.
  • Consultants have a variety of different points of view.
  • IT (Information Technology) governance advisors have an IT-centric perspective.
  • Private corporations may have unanimous shareholder agreements, which limit the decision making and accountability of the board of directors by reserving certain decisions for the shareholders.
  • Any corporation could have a voting trust comprised of some or all of the shareholders.
  • Financing agreements may have terms and conditions which constrain the company’s decision making and may even provide the financers with decision making authority in certain situations.
  • Values, morals, and ethics may not be seen as a critical part of corporate governance.


Often there this is a legal perspective of acting in the best interests of the corporation or the shareholders or other members of the company’s ecosystem.  What does this actually mean? Two example questions, for which I don’t have the answer:

  • If climate change is real, should the company reduce or eliminate it’s impact on global warming, even if that reduces company profits, shareholder dividends, and compensation for the board of directors and C-Suite?
  • Should the company lobby governments to reduce or eliminate environmental laws and standards in order to increase company profits?

After company management, its board, and its shareholders have heard from several different advisors, there is a confusing and disjoint picture of governance with limited shared understanding.

What is the purpose of the corporation?

Is the purpose of the corporation to maximize money for shareholders? Is the purpose to make as much profit as possible?

Larry Fink, in his 2018 letter to CEOs, said “To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society. Companies must benefit all of their stakeholders, including shareholders, employees, customers, and the communities in which they operate…..Without a sense of purpose, no company, either public or private, can achieve its full potential…..And ultimately, that company will provide subpar returns to the investors.”2

 The purpose remains fixed while operating practices, cultural norms, strategies, tactics, processes, structures, and methods continually change in response to changing realities. 3

 What is the purpose of corporate governance?

The purpose of corporate governance is to enable the achievement of the purpose of the corporation, consistent with the corporations values, morals, and ethics.

Corporate governance manages the broad set of conflicts of interests which arise. The OECD governance definition starts with relationships: within corporate leadership, as well as stakeholders and third parties.  Any relationship has the potential for conflict of interest, because company ecosystem members may have different or conflicting interests.  For example, how should both profits and costs be allocated among the ecosystem members, including: CEO, C-Suite, shareholders, employees, and society. This conflict become acute in cases of poor profits or losses.

Perhaps the greatest conflict of interest is deciding the degree to which the corporation extracts value from society versus creating value for society. An example is the decision on whether to whether to replace local community employees with lower-cost offshore staff which may benefit the off-shore communities or retain the employees in order to sustain local communities.

What are your next steps

The following next steps should be time boxed in a short time frame by limiting scope and using assumptions when necessary.

  • Agree upon the potential value, if any, is of a common understanding of the company’s purpose and the purpose of corporate governance. If there is little or no value, don’t proceed.
  • Document the company’s current ecosystem members and relationships among them.
  • Document the company’s current process for major decision making.
  • Document the company’s current process for monitoring objectives, action plans, and ecosystem relationships.
  • Review the process for making major decisions and revise if necessary in order to make decisions regarding the purpose of corporate governance and the definition of corporate governance. For example, does the CEO make a single recommendation to the board of directors (or does the CEO provide alternatives) based upon analysis?
  • Ask your major shareholders, board of directors, and C-Suite how they would define corporate governance.
  • Ask your major shareholders, board of directors, C-Suite, employees, and other members of the corporation’s ecosystem how they perceive the corporation’s current purpose and its current values, morals, and ethics. Also ask them why they say that i.e. what is the perceived evidence.
  • Ask your major shareholders, board of directors, C-Suite, employees, and other members of the corporation’s ecosystem what changes, if any, should be made to the currently observed purpose and values, morals, and ethics. Also ask why these changes should be made and the impact of these changes.
  • Get the perspective of difference advisors as to the purpose of corporate governance and the definition of corporate governance.
  • Make the decisions regarding: the definition of corporate governance, the purpose of corporate governance, and the company’s values, morals, and ethics.
  • Identify the implications of the above decisions. The impact includes: talent management, value creation plans, board of directors and committee mandates, company policies, etc.


1 Based on “G20/OECD Principles of Corporate Governance”, 2015  I added the concept of third parties,


 3 Page 17 The five most important questions you will ever ask about your organization (2008)   by Peter F. Drucker,  Jim Collins et al, I adapted.

Further reading

What is the purpose of your company?

How do you grow your company’s value? V3

What is the purpose of this article?

Enable a company’s leaders and investors to begin the discussion on how to prepare the company’s value creation plan.  This article outlines the principles that can be used to create and manage the discussion.  This article is not intended to be 100% comprehensive in both breadth and depth. The principles apply to any size company.

You can download a PDF of this article from: How do your grow your company’s value V3

What are the critical learnings in this article?

  • Growing you company’s value requires a competitively differentiated value creation plan, addressing the critical members of the company’s ecosystem e.g. customers, but not only customers.
  • Your company requires competitively differentiated talent in order to develop a competitively differentiated value creation plan. g. if the board of directors and C-Suite are less capable than the competitors’ boards and C-Suites, the company fails at value creation.

Who in the company’s ecosystem are you creating value for?

Ecosystem members could include:

  • Customers
  • Employees
  • Board of Directors
  • C-Suite
  • Shareholders
  • Suppliers and partners
  • The communities in which the company operates
  • Broader society

What is the value you enable your ecosystem members to achieve?

  • Value to customers might include: productivity, saving money, entertainment, improving health, and improving security.
  • Value to employees could include: compensation, enabling their life’s purpose, increasing their value to the current company as well as long-term market place value.

What value do ecosystem members provide your company?

  • Customers might provide: payment, recommending others to your company, and improving your company’s reputation.
  • The community may provide the company with the social license to actually operate. Natural resources companies in many countries now need to consult or even get the support of local communities

How do you share the value obtained by the company?

  • Sharing customer payments includes: deciding how much to charge customers, how much should employees be paid, (for example, should full time employees and full-time contractors be able to make a living income), how much should the board of directors be paid, how much should be allocated to dividends and share buy backs), how much should be spent on activities which improve local communities but generate no income, etc.

How do you decide on how to share the value?

  • The decision process may include consideration of: the company’s purpose, the company’s values, morals, and ethics, laws and regulations, expectations of shareholders and local communities.
  • The board of directors may make these decisions directly, through board approved policies, or delegate some of this decision making to the CEO.

How do you create value for ecosystem members?

  • The specific way your company creates value depends upon your company’s specific situation and characteristic.
  • The assets your company has available include: people (board of directors, C-Suite, employees, contractors, consultants, advisors), processes, technology, intellectual property, trade secrets, supplier/partner relationships, relationships with ecosystem members, and capital.  The reason I put capital last is because there is unlimited capital available for companies that are success at value creation.

What are your company’s challenges is achieving value growth?

Your company is facing competition, often from around the world.  Competitors are always working to be better than your company at:

  • Enabling customers to achieve value and perceive a superior value proposition.
  • Enabling talent (including the board of directors, C-Suite, employees, and contactors) to achieve value. This impacts how talent is attracted retained, developed, and exited.
  • Being productive or lower cost.
  • Attracting the best suppliers and partners.
  • Having better support from the ecosystem.

It can be difficult to assess the root causes of historical value growth.

  • Was success due to competitively differentiated talent and processes OR poor talent and processes but lucky?
  • Was failure due poor talent and processes OR competitively differentiated talent and processes but unlucky?

What are the two most important things to focus on to enable value growth?

  • Meeting the problems and needs of customers better than the competition. This is a combination of growing the number of customers and increasing the problems and needs which are being met. Without customers and without cash, the company does not exist.
  • The most important thing to focus on is the talent. The talent creates and executes the plans to achieve results. There are two groups of talent that must be competitively differentiated: the board of directors and the C-Suite. They company will fail if board the board of directors and C-Suite are less capable than the competition.

Your next steps to create your value creation plan.

In the next three months, you will understand the process to develop your value creation plan.  You’ll go from beginning to end, making whatever assumptions are needed to complete within three months.  Your focus will be on customers and talent – specifically the board of directors chair and the CEO.  In future, you’ll consider more members of your company’s ecosystem.

  • Document your company’s purpose and your company’s values, morals, and ethics. These will guide your decision making and execution.
  • Determine what your customers believe is the value they obtain from your company and how your company is competitively differentiated. Be specific regarding the problems and needs being addressed and the benefits they achieve. You’ll have metrics associated with then.
  • Define internal company customer metrics such as life-time profitability, and customer acquisition costs.
  • Outline future customer scenarios. Describe what is driving changes to: customer problems and needs, the number of customers willing and able to pay for your solution, what customers will be paying.
  • For each scenario, outline the changes and milestones for your company in the next five years in order to grow the total value customers achieve from you and thus grow your profits.
  • Determine the implications of the future scenarios on the required capabilities and characteristics of the board chair and CEO. This requires describing how the board chair and CEO enable company success in the above scenarios.
  • List the changes required to the board chair and CEO selection, assessment, development, and succession processes. This includes describing the type of coaches the board chair and CEO require.
  • Create the ongoing process to monitor, validate and update the value creation plan.
  • Determine which additional elements of the company’s ecosystem need to be included and which assumptions need to be validated as the value creation process evolves.

Further reading

There is overwhelming evidence that most companies are successfully executing their plans to fail and to not grow their value.

Do you understand your customers?

How can the board of directors create value?