Infuse start up teams with females to strengthen the business

Mark Zuckerburg told Sheryl Sandburg, his COO, that he does not check off boxes to get the right people. Mark will not hire to fill a gender quota but he did make Sheryl the most important person on his team and within a short period, the bleeding Facebook was making revenues thanks to Sheryl's new policy on advertising streams.
I also do not like gender and diversity for companies because it is good business sense to have a wide range of people in your business. Ruth Bastedo supports women in business strongly but without the preachiness, just the good business sense. Here is Ruth:

So, what is stopping women from taking major leadership roles in the technology startups of today? Through my work in the field of women entrepreneurs, I have identified five recommendations to increase the number of women in startup teams:

1. Encourage startup teams to consciously analyze the diversity in their leadership teams. What diversity of thought could be missing as part of the growth strategy? Ask founders what might be missing in the mix, from product development to sales strategy to growth strategy? For example, with consumer-oriented products, how is the team addressing the needs of a female user base? Groupon’s subscription base is over 75% female. This is not the type of number to dismiss lightly. At times, the female viewpoint needs to be represented at senior levels in the organization, even if that female viewpoint is that of the end consumer.
2. Tap into a base of experienced, older women leaders. Women business leaders in their 40s, 50s, and 60s are excellent sources of experienced management talent for startups. Tapping into this group and engaging them in technology startups as investors or members of a management team or advisory board can be an excellent way to tap into the experience and expertise of these women. This is the view of private equity expert Jacoline Loewen, Director at Loewen and Partners in Toronto and panelist on the Business News Network television show The Pitch. She says, “Startups are like an intense marriage and choosing a woman 50+ to be a founding member, particularly if you are all males under 30, could be a savvy choice… these guys have to get over the stereotype of mum with the cookie tray nagging about a messy room. At age 53, Arianna Huffington did a startup bloggers’ forum website called The Huffington Post which went on to get sold 6 years later to AOL for US$315 million.”
3. Acknowledge that women may have different needs than their male counterparts. In their early 20s, women can compete more or less head to head with men. Unfortunately, many women soon find that their careers are impacted by the decision to have a family. What they need during this period is as much flexibility as possible. They also need to earn enough money to have good quality childcare so that they can present to that potential investor in New York on the spur of the moment. This need for cash flow during this critical period is important to understand.
4. Support and nurture organizations that in turn support women entrepreneurs. There are several organizations and initiatives in Canada, and increasingly internationally, that support women who want to engage and be successful in high-growth startups. The support for these organizations needs to come from multiple sectors: government, professional services, technology, financial services, and academia. In order to increase the likelihood of success, women need the contacts, networks, mentorship, and access to information that these initiatives can provide. Compelling examples of these types of initiative in Canada include:
   • Canadian Women in Technology
   • Rotman’s Next Steps
   • WEConnect
   • Women’s President’s Organization
   Further examples from the United States include:
   • National Association of Women Business Owners
   • Astia
   • National Centre for Women & Information Technology’sEntrepreneurial Alliance program, designed to integrate women into startup teams of under 100 employees
5. Expose technology and computer science to girls in a more compelling way. Girls and young women love using technology, as any parent with any exposure to girls and their Webkinz can attest to, but how can this early enthusiasm and interest be translated into an interest in product and software design? How can we teach girls to engage in programming in a more appealing way? There are those that are trying, but the representation of women in computer science departments continues to decline. From 2002 through 2009, the proportion of female graduates from computer science bachelor degree programs declined from 19.4% to 11.3% in Canada and the United States (Zweben, 2009).
   Initiatives such as Alice, educational software that teaches students computer programming in a 3D environment at Carnegie Mellon, show a model of how to engage girls in middle school. Alice allows students to learn fundamental concepts of programming and programming logic without a background in mathematics and programming. The software introduces a storytelling model, which allows girls to create software that is personally relevant to them. (For further details on the promise of the Alice approach for influencing later success in computer science education, see the paper by the National Center for Women & Information Technology) Going through the process of learning how to program is very important in the technology industry, not only as a potential pathway to becoming a programmer, but also as important background to enable more effective interactions with technical teams. This early engagement in technology is a critical step in getting women to the point where, in their 20s, they might find themselves in an environment conducive to creating the next “killer app”.

From my vantage point, following these recommendations would help infuse our existing startup teams with female talent and nurture the younger generation of women that is interested in using technology to create products and services that are consumer friendly. Encouraging more women to be a part of high-growth technology startup teams, as entrepreneurs or otherwise, will result in well-balanced technology companies that can compete effectively in today’s diverse world.

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Is Ruth Bastedo Right about Women and Start Ups?

With the recent flurry from Facebook's female COO, Sheryl Sandburg, discussing how women need to lean into their careers, how about encouraging women to apply for positions in start ups?
I'm with Sheryl, women need to do more of the stepping forward. I spent the weekend with a family where the 16 year old daughter won the science fair project, yet the mother is encouraging to follow music. When I probed, she told me she plays the piccolo and, no, she has not won any music award. Her mother just thinks the piccolo is "lovely", but a recent trip to see Billy Elliott shocked them as the entire wind section f the orchestra was done by a key board.
I mentoned to the girl that if she loves science, she might think of the big salary that comes from getting a degree in engineering or science. I also told her there would be scholarships for a female. She can still play the piccolo as a hobby.
In the same line of thinking, Ruth Bastedo's article got me thinking that older women would be great foils for young start ups entrepreneurs. Ruth says:

A recent Catalyst study showed that companies with three or more women on their board of directors outperform those with fewer women by 53% on return on equity, 42% on return on sales, and 66% of return on invested capital (Joy et al., 2007). Moreover, the study found that the link between women board directors and corporate performance holds across industries. I am convinced that part of the reason for our startup’s success, was that, at all times, there was that strong female representation in the founding leadership team (with a female COO and VP Creative) that impacted all parts of the company, ranging from product and service development, client service, human resources, operations, and business development. Our “secret sauce” was the diversity in our leadership team.

If diverse startup teams can be so successful, why are they so rare? Among other factors, the following reasons contribute to the rarity of women on startup teams:

1. There are few women who have a background in technology.Women looking to work with a technology startup are more likely to have a background in sales, project management, marketing, legal issues, or human resources. Even in my case, when I did my new media training at the Vancouver Film School in 1995, there were four women in my class of about 25. To make matters worse, the numbers of women enrolling in computer science at universities is actually dwindling, as will be discussed later.
2. There are very few venture capitalists and investors who are women. Women who are investors are at least likely to connect with women on startup teams. In the United States, investment firms with at least one woman partner are 70% more likely to invest in a women entrepreneur than firms that have only make partners, according to a whitepaper published by the venture capitalist firm Illuminate Ventures.
3. There is no incentive for change. Having young women in key leadership roles is challenging. My partners were not thrilled that I took two maternity leaves, albeit short ones, within two years. People in general are very comfortable with the status quo, and the technology community has a comfortable homogeneity when it comes to the model for success. But as one recent columnist, Natasha Mooney, said, “Hiring your first woman employee when you’re a 30-person company is far more difficult than when you’re a 5-person company.”

Ruth Bastedo,
Read the full article.

Private equity and Jon Huntsman

There is the mistaken belief that the USA president candidate Jon Huntsman is the same Jon Huntsman who co-founded a $1.1 billion private equity firm called Huntsman Gay Global Capital. But he isn't.

The Jon Huntsman running for president is the former governor of Utah and U.S. Ambassador to China. The private equity Jon Huntsman is his father, who previously founded specialty chemicals company Huntsman Corp. and who isn't nearly as involved with the firm as is co-founder Bob Gay (a former colleague of Romney's, as it so happens). The firm also happens to employ Jon Jr.'s brother Paul as a vice president.

Huntsman Jr. does not have any financial interest in his father's firm, according to a source familiar with the matter. He would have a good understanding of the use of many private equity firms who have taken their financial power to re-energize businesses that might otherwise go bankrupt.

Who Will Win the Private Equity Cage Battle between The Bay and J.Crew

Since The Bay's renewal, the males in my family have bought all of their casual clothing there over the past year, and  I had no intention of even window shopping, yet ended up buying business suits too. I would personally say The Bay is back to being a go-to-shopping spot again. 
The Bay has achieved their relaunch thanks to private equity backing with financial depth, and the gutsy CEO, Bonnie Brooks, is probably still in the midst of the final transformation. It is with alarm that I hear the rumours that the preppy and likeable J. Crew is looking to open in Canada. 
Is there room? 
Lands End had to leave with its tail between is legs. How will J. Crew be different?
Well, first, J. Crew will also have the deep pocket, private equity backing that The Bay enjoys. Here is an article detailing the private equity story:

Now we find out that the American retail chain BJ's Wholesale Club, Inc. announced Wednesday that it has agreed to be bought by private equity firms Leonard Green Partners (LGP) and CVC Capital Partners in a $2.8 billion cash deal.

Taking lead advisory roles on the deal are lawyers from Latham Watkins, Simpson Thacher, Bartlett, Wilmer Cutler Pickering Hale Dorr and Potter Anderson Corroon.

Under the terms of the transaction, BJ's shareholders are to receive $51.25 per share, a premium of nearly 7 percent premium over the stock's closing price on June 28, according to the BJ's statement. A proxy statement with additional information on the agreement has yet to be released to shareholders and the SEC, the companies said.

BJ's board of directors has unanimously approved the deal and has recommended it for shareholder approval. The company expects to close the acquisition in the fourth quarter.

BJ's, which operates 190 warehouse outlets in 15 states, is one of the top warehouse chains in the country and the latest in a string of retail pick-ups for LGP this year. The investment house acquired preppy clothier J.Crew, last November and added the craft-and-hobby chain Jo-Ann Stores in December.

Clients and Consultants: Venus and Mars?

Who knew? The key tasks or touch points that clients think are important for their advisers to do and what advisers think make their clients happy are very, very different. Worlds apart, in fact.

I was surprised by the results of the survey done by Jenny Sutton and The RFP Company. Jenny wrote a terrific book called "Extract Value from Your Consultants" - which sounds like a bad trip to the dentist, but if you are an adviser, this is the one book for your summer vacation - it has been a must-read in my office. Here's Jenny:

Earlier this year we conducted two surveys on the drivers of satisfaction when it comes to using consultants. One collected information from the users of consulting services, and the other from consultants themselves.

We were surprised at the massive difference between average client satisfaction and satisfaction as it is perceived by consultants. In addition, consultants and clients seem to have very different ideas about what the important factors are in creating a satisfactory outcome.
You can download a full copy of the report here.

Economist Article

In a recent article on the state of the consulting industry, The Economist  contacted Jenny for her thoughts!

“But increasingly, says Jenny Sutton of the Hong Kong-based RFP Company, clients are refusing to pay for junior staff’s on-the-job training. Instead, they are asking for fewer and better consultants and setting them to work alongside their own staff.”

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How to build a business team for private equity - add an older woman

Start ups are like an intense marriage and choosing a woman 50+ to be a founding member, particularly if you are all males under 30, could be a savvy choice. “Get over the stereotype of mum with the cookie tray nagging about a messy room. At age 53, Arianna Huffington did a start up bloggers’ forum website called The Huffington Post which went on to get sold 6 years later to AOL for US$315 million.”

 “On BNN, The Pitch, we had a team of impressive young men, MBAs, pitching their online furniture business. I turned them down as the passion for profit was apparent, but for furniture, not so much. I had spent the weekend with a woman 50+ who had decorated her home using Kijiji. Now, if she had been part of the team with her online knowledge of competitors and experience shopping online, they would have got the thumbs up. She would have supplied that Tony Hsieh passion – the fellow who founded Zappos, the online shoe website. Investors bang their heads on the table saying repeatedly that the reason they invest is the founding team. If person fills a set of core skills, choosing an older woman would bring a slew of additional soft factors to comfort investors and get them to write a check. ”

If you are in your fourth or fifth decade (or even just thinking ahead), and still planning to make your millions, we have some inspiration for you. These fearless, foxy and over-40 women used their wisdom and savoir-faire to carve out their own places in the world — and were handsomely rewarded for their efforts.

1) Ursula Burns (Born 1958)

Early life: Joined Xerox in 1980 as a summer intern. She took time off to pursue her Master's Degree, but continued to work at Xerox's corporate office in various roles throughout her 20s.

The turning point: In 1990, a male senior executive at Xerox offered her a job as his executive assistant. No doubt, anyone might have thought of this as a dead end for career aspirations. However, Ursula took the job and then went on to climb the ladder of executive assistant-dom, working for the Chairman and CEO within a year. Finally, at the age of 41, she was appointed vice-president and then senior vice-president.

The breakthrough: Ursula worked closely with Xerox's first female CEO, Anne Mulcahy, and went on to succeed her as CEO in 2009. Ursula was 50 years old at the time.

Why we love her: The first woman to succeed another woman as CEO of a Fortune 500 company and become the first female African-American CEO of a Fortune 500 company. Mostly, though, we admire Ursula's confidence in taking a job she probably felt was beneath her, while recognizing that she would use the opportunity to her great advantage.

2) Arianna Huffington (born 1950) 

Early life: Born in Greece and educated in England, Arianna wrote several books, magazine articles and was often a commentator on news talk shows. For many years however, her biggest claim to fame was as "wife-of" politician Michael Huffington, whom she divorced in 1997 at the age of 47.

The turning point: In 2003, she ran for the office of governor of California and lost to Arnold Schwarzenegger (insert your own joke here!). She needed a new focus and realized the future was the internet, so the 53-year-old launched Arianna On Line and became a pioneer among female internet bloggers. At the time, most internet bloggers were introverted males, but this did not deter her vision.

The breakthrough: In 2005, Arianna re-launched her site to become The Huffington Post. Known as HuffPost among its fans, the site rapidly became a forum for discussion on current events as well as a gathering place for bloggers. It grew to become one of the biggest media brands on the Internet. In February 2011, AOL acquired the site for US$315 million.

Why we love her: Arianna never shies away from an opinion or a debate and she encourages the same in others. At a TED Talk, Arianna gave her top advice for women who want to succeed - get more sleep!

3) Carolina Herrera (born 1939)

Early life: She grew up in Colombia, in a privileged family where she was not expected to work, and was married off at the age of 18. Though she had two daughters, the marriage did not last. She was the first person in her family to divorce and humbly moved back in with her parents. She married again, to the love of her life, a few years later and had another two daughters.

The turning point: While she had always loved fashion, Carolina had only worked briefly in the industry as a publicist for Emilio Pucci in the mid-1960s. At the age of 40, she decided to get serious about her passion. She thought about designing a line of fabrics, but was encouraged by a good friend to think bigger.

The breakthrough: Despite her family's skepticism, Carolina sketched 20 gowns and had a dressmaker in Caracas sew them. She carted them to New York and started showing them around. She was shocked when the orders started flying in. Unfortunately, she only had the samples and no plan for production. She returned to Caracas, found an investor and then in 1981 set up an atelier and showroom in New York under the brand Carolina Herrera Ltd.  She was 42 years old.

Why we love her: Carolina came from a traditional world where it was not looked upon favourably for a woman to have a job. She defied traditions and believed in herself, despite the shaking heads around her, and become an international success. Yet she retains her poise, grace and values. She never works late or on weekends and does not expect her staff to either. She says, "If it can't be done between 9 and 5, something is wrong."

4) Liz Claiborne (1929 - 2007)

Early life: On a family trip to New York City in 1951, Liz declared she was staying. The Belgian-born 21-year-old got out of the car and, with $50 from her father, went to stay with her grandmother. She found work with a clothing designer and for the next 20 years apprenticed with the New York fashion scene's finest.

The turning point: When her son reached the age of 18, Liz felt that if anything happened to her, he was now of an age where he could support himself. She decided the time was right to take a risk. She gathered up $50,000 of her own savings, plus $200,000 invested by friends, family and business associates.
The breakthrough: Liz launched her eponymous fashion line at the age of 47.  In the first year, she experienced sales of $2 million. Within two years, her profits were $23 million and she went public in 1981, making the Fortune 500 in 1986. Not only was this sweet recognition for the company's 10th anniversary, it was the first time that a company founded by a woman made the Fortune 500 list.

Why we love her: As a working mother, Liz was dialed in to the growing number of women in the workforce who needed practical yet stylish corporate clothes. She trusted her instincts and bided her time. Her rule of thumb was that she would never price her items higher than what she would be willing to pay and was known to pose as a sales clerk in order to get objective opinions from the women buying (or not buying!) her clothes.

Do you think innovation can be increased?

Revealed in Connected is that our social networks drive and shape our lives. You are impacted daily by the people around you.
Nick Christakis writes about how much money you make and even if you vote is all determined by your social network.
We are like flocks of birds or schools of fish making subtle changes from those around us. Unconsciously, we are led by those around us which is why you do want to join that expensive business club, or get the best university degree and go to the alumni events as much as possible or set up a meeting with someone who is far ahead of you.
I wrote in my book, The Power of Strategy, that if you hang around with the same golf buddies only, that you will not move beyond them. This book is a good read that confirmed to me the power of business clubs, university alumni events and conferences. Pick your networks and those with whom you share social networks. Make sure at least 20% of those people scare the heck out of you. Do one monthly event where you are uncomfortable. Change up your social group to get different life results.
Thank you to Rick Belcastro of EFG Canada. Rick is a wealth management specialist and is one of those people who knows how to network and socialize very well.

Top 5 annoying jargon for Private Equity

When reading a business plan, I concede that jargon words are used to simplify complex businesses. "Platform" or "solution" or  "best of breed" are common, but there are so many I hear on a daily basis that make me cringe - at the end of the day, we are all in this together. Let’s collectively pull on the rope, see if we can stretch the envelope, reach a higher plain, chase our dreams, grasp the nettle and take a bird’s eye view of our collective responsibilities. Let’s reach for the stars and remember there are no problems there are only opportunities, another day another opportunity. If we outsource and offshore nothing is beyond our grasp, pick the low hanging fruit, seize the moment and if you have to ask where we are going you aren't there yet - we definitely need a road map.

Here, we list the 5 words and phrases these executives would outlaw:

1. Reaching out

– Michael De Pencier, managing director, Investico

2. Downsizing

– John Loewen, private equity financier, Loewen and Partners

3. Underlying

– Martin McCourt, chief executive, Dyson

4. "Run this up the flagpole and see who salutes."

– Cathy Turner, group HR director, BMO

5. "Soft skills."

– Sandra Porter, HR director, Starbucks

A professional writer has a few words of his own that he sees as lazy. Maybe, this non-business writer can even give you a fresh perspective on your Twitter writing:

Words are the lifeblood of your writing. They’re what you use to build credibility or diminish it. Words matter. They’re what make your arguments more compelling, your prose stronger, and your craft more captivating. Untrained writers can be careless with their words. It takes discipline to use these tools well.

“Stuff” Stuff is a lazy word. Only use it sparingly when you’re intentionally trying to be informal. Instead, use a more descriptive noun.

“Things” Things is another lazy word. People often overuse it. While not always inappropriate, it also should be used on rare occasions.
Things is nondescript and can often be replaced with much better nouns, such as “reasons” or “elements” or “issues” and so on… 

“Got” Got is a terrible verb. It mean obtaining something or as a helping verb like have. More often than not, got can usually go away.
Instead of saying “I got up”, say “I woke up.”
Instead of saying, “I got a baseball”, say, “I have a baseball”.

Read more writing tips by Jeff Goins here: 

3 Reasons for business owners to listen to Rick Nathan

Recently, on BNN The Pitch, Andrew Bell asked a very good question about what private equity judges to be their most important reason to do a deal. Rick Nathan answered. Now Rick runs Kensington, one of Canada's best funds, and he built the CVCA, so we are talking about a deep experience of great partnerships with business owners. Anyone watching the show, deep down in their bones, would also have known the answer.
Quite simply, it is the people.
Early stage owners nod their heads - I'm a good guy, my golf buddies like a beer with me after a game.
Well, that was not Rick means. He judges their business readiness. Rick tends to focus his questions on The Pitch around these three points:

1. What have they accomplished in the past? 
2. What networks do they operate within - is there a top level adviser involved? 
3. How much business acumen is in their team and are they to really grow their business? Have they really analysed their competition and how they can build a niche market and expand from there.

To give Rick's focus on the people a bit of meaning, let me run through a personal example that happened to me after The Pitch went on air. I got a call from an entrepreneur who had a product and wanted help. As I gently probed, he revealed that he had not even drafted one page of information about his concept, did not have any social media accounts where we could connect, was still using hotmail for his email and did not even have a professional signature line in his email where you have a phone number and your name in full.
Why bother phoning then? Why not just chat to your golf buddy? How am I going to take a few minutes to help someone not in my client segment? I enjoy helping but if there is nothing for me to email to someone else, then there is not a starting point.
I also asked if he would go on The Pitch to just even discuss his business idea, but that was a damp squid too.
To all those entrepreneurs, to get Rick Nathan to help you, have a full business plan, a full PowerPoint deck. At least read one book on how to attract money. An easy book that is popular with the BDC and the VCs, a go-to-guide as you develop a business, is Money Magnet. Otherwise, browse the Internet.
At least set up a Twitter account.

Jacoline Loewen is an expert in private equity and you can see her on BNN The Pitch

More companies come off the stock exchanges - thank goodness

Reading about the 2008 crash is interesting as all the signs were visible. There were certainly steps that could have been taken before 2008. 

Getting the financial analysts off the backs of the corporations, for example. 

It was almost as if companies were being managed from the offices of such people, who insisted on major changes with barely any knowledge of what really went on in these massive enterprises, let alone caring about their long-term future. More companies could have come off the stock exchanges, or never have gone on to them in the first place. There were other, more patient and sensible ways to finance enterprises.

Private equity, for example.

The game changer is private equity. My favourite money people act as a mini bank but who deal with flesh and blood people. This private equity actually looks for company owners who treat their customers as worthwhile serving repeatedly for many, many years. The best private equity are owners themselves and tend to take a non control position and let the owners get on with serving their clients.