Dragons' Den Wants You

It's the third exciting season of CBC-TV’s Dragons’ Den and they are looking to audition contestants for the show. It is not quite American Idol but if you have a business idea or business needing money, it is well worth entering. Get used to the Dragons' fiery breath because they are actually very generous in saying what they think. Once you've licked your wounds, you will realize you just got the best advice and it was for free. Maybe you will get the money or even win $50, 000 like Trent Kitsch of SAXX who was assisted by Loewen & Partners.

In Ontario:

April 12th at The Accelerator Centre London, ON

April 16th at Richard Ivey School of Business

Money Magnet: Attracting Investors to Your Business

Time to pop the champagne - I finished the final editing of my book Money Magnet with the great editorial team at Wiley. Since this is my third book, I am asked why I choose to go with an old technology publishing house rather than post as an e-book or do it myself with a vanity press.

Well, because Wiley is firmly planted in the 21st century and knows its place is no longer the gate keeper of authors clamoring to get their work out to their adoring public. What they are doing is helping experienced writers like myself learn the new technology cyber ropes. They are building my book website and have done a superb job of editing my book with not one, not two by three editors who have cut my ramblings to a sporty, fast read.

The bigger job I have is fitting Money Magnet to my company, Loewen & Partners as the client base for our company are business owners with companies making more than $10M revenues and Money Magnet is definitely a broader readership. Any advice?

Would You Think Agriculture Was the Next Bubble?

The housing bubble helped us get out of the mess from the tech bubble bursting and so now begins the next bubble - alternative fuels.

Loewen & Partners was invited to listened to Mayo Schmidt, the charming and erudite CEO of Viterra which is Canada's fastest growing agricultural company - their tag line is "Leading Canadian Agriculture." Mayo is one of those mid-West men with the folksy trustworthiness but he is probably the sharpest tool in the shed. He blew me away with first of all his company's earnings and future vision, but also reminded me of how fast the world is switching away from oil. Mayo says that Brazil has converted more than half their fuel needs to sugar cane and other cellulose fuel. This land use and conversion of agriculture away from food to energy use will bring challenges as the world population is expected to keep escalating.

While I was in South Africa, I met with one of the investors from the Dubai Fund who are busy buying up land in South Africa where the property rights are still stable - no crazy Bob Magabwe types taking land.

Here's a quick list of fuel prices around the world:
Prices are quoted in US dollars per gallon for regular unleaded. March 1, 2008
Oslo, Norway $6.82
Hong Kong $6.25
Brussels, Belgium $6.16
London, UK $5.96
Rome, Italy $5.80
Tokyo, Japan $5.25
Sao Paulo, Brazil $4.42
New Delhi, India $3.71
Sidney , Australia $3.42
Johannesburg, South Africa $3.39
Mexico City $2.22
Buenos Aires , Argentina $2.09

Riyadh, Saudi Arabia $0.09
Kuwait $0.08
Caracas , Venezuela$0.12

Does writing a business plan have power?

Starting your own business makes you rich, right?

Unfortunately, that fairy tale does not always end happily. You are probably aware of the statistics on just how many companies fail before reaching their five year mark. It is just not true that owners take home the big bucks. Too often they are paying everyone else first and when it’s time to pay themselves, they find the cupboard bare.

Many entrepreneurs also discover that a mortgage, a pension plan, a medical plan or other long-term benefits provided to employees, are not available to them because of their status as “self employeed”.and also out of reach of their budget. After a couple of years of that reality, the entrepreneur stops dreaming and decides that working for “The Man” looks pretty good, particularly if it entails union wages or a government pension plan.

Business entrepreneurs are crucial for the future wealth of our country but are often given little thought (look at the last Ontario provincial election – need I say more?). Now with the alarming question of “Is this a recession?” even the news headlines have turned away from Hollywood celebrities and toward the economy” – although CNN did still make Heath Ledger’s death their top story the same night that every stock market on the globe was falling off a cliff. But what the heck, I enjoyed looking at Anderson Cooper’s blue eyes and his combination of Wall Street pinstripe suit with purple and gray striped tie!

With this incoming tsunami of trouble, our provincial governments are turning their attention to SMEs and pondering how to help them. If you buy the life-boat theory - you cannot save everyone from drowning - you need to answer the question of just who does get to climb into the life boat. Rather than encouraging any and every start up, government can focus on assisting industries with high growth potential. If you start a computer industry-based company, your chances of growing far exceed those of starting a hotel, a clothing store or a consulting company.

What is missing in the economy are those growing companies finding a financial investment of $1M to $10M. Supporting those investors ploughing money into growth companies would be a smart move. Venture capitalists and private equity funds investing amounts under $10M tend to excel in filtering out which businesses and owners are most likely to grow our Canadian economy.

As an entrepreneur, you know economic change is upon us. You no longer have time to point the finger at China, India or our government policies. Right now, you need to make decisions to get ahead of the global crowd. Scott Shane, professor of entrepreneurial studies at Case Western Reserve University and author of The Illusions of Entrepreneurship, says, “the typical entrepreneur makes decisions that lower the chances for success. Part of it is that they're in a hurry and don't have time. So to give you a good example -- a business plan. We have lots of evidence that all kinds of performance measures of startups are enhanced if you write a business plan” [www.businessweek.com, 1/7/08]. Why doesn’t the average owner write a plan? Besides being busy, owners just don’t see the benefit.

If you want your business to be more than a lifestyle, write that plan. Take this weekend to break out your laptop, Google “business plan” and you will find a plethora of templates to use. Then share it. If your only employee is your dog, tell your mother. “Tell everyone,” says Tony Griffiths, one of Canada’s top investors in growing entrepreneurial companies. Tony, who invests in growing companies, recalls how years ago, while he was watching his wife play tennis, a young man sitting next to him struck up a conversation. The subject moved to business and the young man shared his business plan with such enthusiasm. Tony made the decision there and then to become an investor.

The young man had no idea that there was private equity interested in his size of business, but since he had completed a step toward a higher level of success – writing a business plan – he accidentally gained access to capital. According to Tony, the company went on to grow all the way to a public listing on the stock exchange. The young man is now much older and does own a mansion. One answer to surviving the looming economic storm is remembering the fundamentals: make sure your business plan is in great shape and perhaps you will reach the level of entrepreneurship that earns you the big money.

Six Ways to Say “Yum!”

If you want to dazzle the people at your next dinner party with your marketing knowledge, spend time with your teenagers while they plug into the computer. Book an evening at home with your children telling you what they learn from TV and the computer and you will be a big brand expert in the surprising new ways to connect with the market.

1. Traditional TV blended with Web

Notice how your daughter watches Dr Who on TV while peering at her laptop, checking out the website for in-depth, full length stories, usually through an online video ad. Hopefully, she is not also accessing your VISA card to book her trip to London’s BBC studios. Be aware of interactive social media as strong marketers are learning to use this new technology without backlash.

2. Engage Your Customer

Email allows for one-on-one conversations: for example, Rogers emails you a movie discount coupon, which you print out and then rush to the video store. At Loewen & Partners, we email our list of entrepreneurs and fund managers with personalized messages. Check out your kids’ summer camp on-line rating sites. I was intrigued by one camp with several postings saying that the counsellors were too busy making out with each other to organize activities. Bet that won’t be happening this summer!

3. Globalize Your Message

You may have noticed that the world has come to Canada, particularly Toronto, offering perhaps the biggest challenge for marketing. Technology is causing barriers to crumble and the impact will probably continue over the next twenty years. What does this mean for marketers, and for women, both in the office and at home? Americans embrace the saying, “drastic change requires drastic action” and are busy hiring non American CEOs to smash their corporate cultures and traditional marketing plans. PepsiCo, the world’s fourth largest food and beverage company, awarded their CEO position to an Indian woman, Indra Nooyi, who wears a sari to work. How’s that for a take me as I am attitude? Which brings me to my next trend (no, it’s not The Spice Girls who, incidentally, do know how to market because even Rex Murphy dedicated a column to their branding success).

4. Add Girl Power

PepsiCo asked: How could their marketing gain fresh energy and momentum? What is different, unique and special? When you put "fresh eyes" on the question, change happens, and Indra Nooyi is doing just that for PepsiCo’s revenues. Meanwhile, Pier One’s earnings are limping along, perhaps because they have no women on their Board? I know women in Oakville who’d be delighted to help out and would talk marketing plans for the price of a cup of coffee.
Marketers who support the new reality that girl power is here - and it’s not just Scary Spice being cheeky - will be ahead of the pack. I just spent my weekend holed up with high testosterone Bay Street money men judging the Ivey Business Plan competition. Once again, the $20,000 top prize went to a female-led team and as I sat with the Venture Capitalists, they recalled the previous year’s female winner saying, “What a fire cracker!” I have no doubt these fellows would hand over twenty thousand cool ones to any woman who demonstrated she could bring in a sustained revenue stream of $5M. If women want to get ahead in Canada, they need to make the decision from a very young age to live, breath, and die for business.

5. Nod at Career & Mothering

Let’s be honest, many women self-select out of the work world to be mothers. “Where are they now?” articles on MBAs show that even career-oriented women may choose to be at home with their children. The smartest woman in my MBA class is now at home with her two boys and even my sister-in-law went home within months of returning to her Morgan Stanley job after childbirth. Shrewd marketers will understand this female angst over work and babies just as Dove channelled women’s feelings over the media’s use of perfect female bodies.

6. Be Gutsy

If Indra Nooyi can call PepsiCo’s new division Yum!, think of the marketing you could do.
This blog also appears in The Women's Post.

Competitiveness No Longer Only A Government Issue

Private equity is a new alternative structure for company owners to get capital to grow their businesses. Too often, PE is lumped under the umbrella of the huge billion dollar deals which get a great deal of press.
What can be missed is that small companies who have up until recently been ignored by investors, would not have been given the money to grow because of lack of cash. Now, a family owned company can get a new lease on life as they are able to get sophisticated partners to take their business to a new level. Private equity injects small business with growth hormone to make even Sylvestor Stallone jealous. A growth opportunity for privately held companies gives enormous competitive advantage to a country, particularly over the next ten years as Canadian companies go global and need the money to take higher risks. Old style investors would reach for their PASS stamp where private equity investors say OK - let's give this a go. Competitiveness is to be nurtured.

"Increasingly competitiveness is no longer a government driven process, it's a process where government and business and universities and other institutions work together to raise the bar,"

says Michael Porter, top author of strategy and finance books, prof at Harvard.
What I find heartening is seeing the funds in action with the family businesses we have helped grow with private equity financing. I helped find a CFO for a construction firm and I could see directly how having the fund manager also participate in the interviews was fuel in the tank for the owners. Would your bank manager do this for your company? Would your shareholders on the public stock market do this for you? Would your Board members?
This Monday morning, out on the shop floor participation is the secret of how private equity rolls up their sleeves. Their day-to-day work that they add to the company is the magic ingredient in the financial recipe. Those private equity people coming into a business have entrepreneurial energy. It's very hard for outside experts to measure and nearly impossible to understand if you do not have business running through your veins.

If Marketing Experts Ran Election Campaigns

"Most consumers have stronger relationships with brands like Starbucks (the “third place” after home and work) than with their elected representatives or the umbrella political brands, Democrat or Republican." This data is researched by Professor John Quelch and discusses what politicians can learn from consumer marketing.

Professor Quelch suggests that if political candidates want to have a relationship with their voters, they do need to look more to commercial marketing for expertise on how to reach their audience in a meaningful way.

Does this cheapen politics?

I believe it strengthens it as those 20% of hard core voters will still read the New York Times tables of comparisons on each position and cast their vote.

But what about those apathetic voters who just don't think their vote matters? If there's a simple, fast quick way to make a much more meaningful decision, will they be more likely to vote? Probably. So less intense voters might not be more informed on the details but at least their attention is being attracted, even if it's superficial.

I suppose the worry is that someone like an Arnold Schwarzenneger could thrill and entrap a mass, dumb electorate with a flashy, "I'll be back" type of message that draws in the fools who do not "get" how hard running a goverment can be.

I think people are smarter than that - even those who are not educated past Grade 5.

Watching the Democratic race, you can see that Clinton wants voters to understand that she gets the work done. Her true core competence is managing the process of politics - administering the nation. Marketing the Democratic vision is simply not her strength - getting her goals achieved are much more her strong suit. Just as Starbucks is about giving you an interesting cup of coffee - it has to weave an entire story around what buying that coffee also brings. They have done that very well which is why the brand endures and is accepted even at The Great Wall of China. Hilary also needs to create her surrounding story as we experience a Clinton administration. Her Youtube ad with Bill and her imitating the season finale of The Sopranos was a good start, but her marketing needs to go beyond her, just as Starbucks goes beyond your cup of coffee.

Marketing the Starbucks way is tough to achieve because commercial marketing brings complex back stories to consumers' short attention spans in a two minute commercial of great wit.

The Microsoft Apple ads come to mind with the two characters creating an image of the products. Clinton and Obama are also two characters. As a side note, Hilary is smiling and being vivacious but someone tell her to lower her chin as she spends too much time looking down her nose.

Here in Canada, I enjoy USA politics. For me, the marketing on Youtube has been useful. Also getting space on TV that goes to Canada; CNN Anderson Cooper is doing a great job with his candidates' public forums and this is the right direction. I have got to know more about the politicians than my own and both Hilary and Obama are brand favourites for me - even though I would be probably be more for smaller government, less taxes. I am watching their many victory speeches and those moments of truth are probably the best marketing opportunities.

So America actually markets its emerging, new presidents to the world far better than any other country, even France with its super model first lady!

Commercial marketing of politicians with strong branding support - much like Starbucks - has other benefits for America too. Audiences in other countries such as Canada or India get to learn more about American values, what you think about yourselves and your priorities. We get past the stereotypes and get to see you are a complex, thoughtful nation of debaters not afraid to stand up and confront each others ideas and positions. This just does not happen or get accepted by a large portion of our world's politicians - good luck finding Robert Mugabwe's last debate in the government of Zimbabwe, for example. America's politicians and their long campaigns are inspiring - so keep on sharing with the world.

Leadership Lessons of Field Marshall Montgomery

As we begin 2008, the threat of recession is unnerving and the world's finance markets which carry the wealth of their top companies are dipping and diving.

This crisis provides a challenge for business leaders So what can we do? We would be comforted by advice from successful leaders. One such leader, who kept a calm head and urged the Allies to victory in World War II, was the much-loved Field Marshal Montgomery. What would he say to the business leaders of today?

We have a good idea because after World War II, Field Marshal Montgomery wrote his own memoirs which include General Sir Charles Loewen who helped plan D Day. Here at Loewen & Partners, we like to draw on the expertise of Montgommery as experienced by our relative.

Having met with many captains of industry, he was intrigued with their similarity of roles. He spent much time debating with them on how to achieve great leadership whether in industry or the military. The following is a summary of his main ideas left in his words as much as possible.

Montgomery believed leadership to be: “The capacity and will to rally men and women to a common purpose and the character which inspires confidence.” In particular, Montgomery liked to quote Harry Truman, “A leader is a person who has the ability to get people to do what they don’t want to do and like it.” This has a warm and comforting ring to it but many leaders find it challenging to be able to do just that. Montgomery does give a great deal of insight for leaders today how they can bring people to rally around the company's performance.

To be effective, Montgomery says a leader must understand what their people will be asking about their leader:

1. Where are you going with our enterprise?
2. Will you go all out for our enterprise or campaign?
3. Will you go all out for us?
4. Have you the talents and equipment? (This includes your knowledge, your past experience and your courage.)
5. Will you take decisions, accepting full responsibility for them and take risks where necessary?
6. Will you then delegate and decentralize, having first created an organization in which there are definite focal points of decisions so that the master plan can be implemented smoothly and quickly?

The best leaders know that they must answer the above questions fully to gain support from their people. Montgomery emphatically states that a leader must:

1. be able to make decisions in action and maintain calmness in the crisis.
2. know what he wants.
3. see his objectives clearly and strive to attain it;
4. let everyone else know what he wants and what are the basic fundamentals of his policy.
5. create ‘atmosphere”.

Montgomery says,

"Some commanders consider that once their plan is made and orders issued, they need take no further part in the proceedings. Never was there a greater mistake.
Leaders need a firm grip, not interference, or cramping initiative of subordinates; indeed it is by the initiative of subordinates that the battle is won. They need to get out to the people."

He goes on to emphasize, “The strength of an organization is, and must be, far greater than the sum total of its parts." Remember, this was written before Peter Drucker's best sellers on how to be an effective executive in an organization. To get a sense of the thinking behind Montgommery's actions, read these selections from his writing on leadership:

"That extra strength is provided by morale, fighting spirit and mutual confidence between the leaders and the led and especially with the high command and the quality of comradeship and many other intangible spiritual qualities.”

"The raw material with which the general has to deal is men. The same is true in civil life. Managers of large industrial concerns have not always understood this; they think their raw material is iron ore, or cotton, or rubber – not men but commodities. In conversation with them, I have disagreed and insisted that their raw material is men. Many generals have also not grasped this and that is why they have failed.”

"A leader must understand human nature. Bottled up in men are great emotional forces. It these are given an outlet, they can be used in a positive and constructive way, and which warms the heart and excites the imagination. If the approach to the human factor is cold and impersonal, then you achieve nothing. If you gain the confidence and trust of your men and they feel their best interests are safe in your hands, then you have in your possession a priceless asset and the greatest achievements possible."

"The morale of the soldier is the greatest single factor in war and the best way to achieve high morale is by success. Communicate your successes."

"All men are different and you need to match the personality to the job. Don’t
try and make a warm personality sit in the back office, counting figures."

Montgomery has comments on strategic planning which are still useful today:

Operations must develop within a premeditated pattern of action. If this is not done, the result will be compromise between the individual conceptions of subordinates about how operations should develop.The master plan must not be undermined by the independent ideas of individual subordinate commanders at particular moments in the battle.”

Montgomery believed there was a strong use or “place of the conference”. He advises,

"It will be weak if it is just to gather ideas. A leader needs to be well
prepared before starting the process.He needs to have previous thoughts, he must
have made wide field visits, he must have strong staff contact and not just the commanders one level below, he must listen to staff and once again, not just the
commanding staff. The commander should know what he wants to do and if it is possible."

If a conference is necessary, Montgomery advises that it should be to give orders and to assess where everyone thinks they are going. The leader should not bring the men to him but should go out to the people. "Do not have a conference at Head Office." Montgomery again emphasizes,

“The big mistake is to think that once the order is given there is nothing more for the leader to do. The leader must take it upon himself to outline the plan in his own words and images and put it in writing. The Commander must write this himself first. Staff and subs can then take the draft and initial plan and fill in the more detailed work. When the plan is based on the written word of the commander it minimizes mistakes and powers action."

One of Montgomery’s heroes was Sir Winston Churchill. Montgomery liked to read Churchill’s study of Marlborough and quotes,

“The success of the commander does not arise from following rules or models. It consists in an absolutely new comprehension of the dominant facts of the situation at the time, and all the forces at work. Every great operation of war is unique. What is wanted is a profound appreciation of the actual event. There is no surer road to disaster than to imitate the plans of bygone heroes and fit them to novel situations.”
The senior commander should keep himself from becoming immersed in detail. He needs to push this down to his subordinate officers. Do not aim to see every tree because you will not see the woods. The leader should make time for quiet thoughts and reflections."

"The commander needs to be thinking at least two campaigns ahead, not just of the upcoming battle. The Master Plan is a changing document. Successes gained in battle can be used in the next one and the ones planned further ahead.”

Above all, Montgomery advises that leaders must realize that people have a need for truth. Montgomery says that people always find out the truth and, if the truth has been distorted or delayed, then there will be a loss of confidence. Timely truth is critical. The truth will out anyway. In summary, Montgomery believed leadership to be an exercise in effective influence. He believed that your leadership is measured by the strength of flame that burns in peoples’ hearts for the common cause, and the magnetism that draws hearts towards you.

The above article is taken from the book:
Field Marshal Montgomery, The Memoirs of Field Marshal Montgomery; My Doctrine of Command, Collins, London, 1958.

No Longer a Man's World

Every year, the Ivey Business School runs a start-up business competition where MBA students from across the country are invited to pitch their ideas in front of real Bay Street investors. This is a serious opportunity because the winner takes home $35,000 in seed capital to take an idea from the pages of a business plan to the real world.

The students go through the experience of being hammered by venture capitalists and, hopefully, once they have licked their wounds, they will learn from the feedback. This year, I participated as a judge in Ivey’s annual MBA business plan competition. Late in the evening, relaxing in my hotel room, flipping through business plans, I watched a program with talking heads discussing the business world and was vaguely irritated by a woman who said, "It's a man's world, still, and men need to help women get ahead."

While I agree that it is good to understand women and how they fit into the business world, I don't think men exclude or keep the business goodies all to themselves. The number of female names on the business plans from MBA students across Canada scattered around me, shouted that women's confidence levels are changing at break-neck speed. Yet, did these female students need an extra hand-up, or a special category for female-run companies, as this TV interview suggested? More so, would the male venture capitalists shun the plans presented by women?

When I was in MBA school (decades ago – yikes!) I liked to be one of the guys and if a guest lecturer commented in surprise, "I see there are women here in the MBA program," I would sting with embarrassment. Call me old fashioned but I still prefer to think of myself and the other judges as one group – not male or female.

The next morning, humming James Brown's catchy tune, It's a Man's World, I headed over to the Juniper Hall (no dead, white, male names used by Ivey) to join the other judges and sit through a long morning of start-up business venture presentations.Investing is about placing money with the sapling of a business that is most likely to grow into a huge, strapping oak of a global enterprise. With venture capital, there is no room for bias or favoritism. It comes down to the black crucible of business – it's about who has the best plan to make the most money over the next five to seven years.

Finito.

My group of venture capitalists ranked two teams at the top; both had male and female presenters. Coincidence? I think not. Yin and Yang does seem to work better in business. Later at lunch, I caught up to a couple of the women contestants who were judged by my group of fund managers, and I posed the question about what it is like being female in business and doing the MBA. Faye Xuan, from Simon Fraser University, looked struck: "I'm part of my team, I don't really think about the fact that I'm female. I prefer to focus on my team and how we have something unique and special that will keep us going".

Reagan Davidson, from the Dalhousie team that ended up winning the competition and $35,000, said, "I've noticed that males and females seem to have complementary traits which, when used cooperatively together can maximize the strengths of both." These women are my kind of gals!

Heading home, I had a swing in my step. The strident tones of that woman on TV with her underlying subtext that men were holding women back, had been drowned out by the positive spirit of these young women coming into the business world. They are not denying the fact that they are women (unlike me, years ago). Instead, they recognize clearly the value of their own very female traits in the business world.

Educating Our Girls

On reading my girls-only high school's annual fund raising pamphlet this year, I noted that its carefully chosen words celebrated and reflected the many career possibilities for females. Yet, one glaring career choice for women (in my view) was omitted – Motherhood.

My high school has a clear purpose – the best of learning, irrespective of gender. Surely then the role of girls' schools in this century is about nourishing identity, purpose and pride in being uniquely female!But being a potential mother should also be part of a girl's identity and a source of pride. Isn't motherhood worthy enough to be listed as a career choice by a girls' schools in their brochures? Not mother slash brain surgeon, but mother full time? Or does that choice belong firmly within the domain of each girl's family and culture?I reflected on my own time at high school 30 years ago, grateful that the experience taught me to make choices and to develop a purpose. At my graduation ceremony, our guest speaker talked about achieving our full potential in our future careers, but I did not hear anything about the choice of motherhood.

What I heard was that I should choose a career, just like the male of the species.It was only after having children that I discovered that motherhood could not be outsourced. Life choices were a great deal more complicated.Now, as I approach our class's 30th reunion, I'm aware that I'm on the downhill slope, past 45 and moving far too briskly toward 50. Truthfully, I would like to have had more children, but now it's too late.

What stopped me?

Was it the script handed to me in school about what is important and how women can make a difference and be of value? I believe that pride in motherhood has fallen, and I was one of those women who kicked it to the bottom of my list, assigning it limited value until I went through the experience myself.Without an early awareness of the complexity of motherhood, will girls miss the opportunity to reflect about the many ways in which other women have managed the choice of children or no children? I believe that the sharing of experiences would be empowering to them.

Canada's birth rate is diminishing and our society is at risk of fading away. If female schools are staying silent on motherhood, how can we expect anyone else to begin the conversation?I respect motherhood now after being so disparaging about it before I went through the experience. I think it is important that girls' schools include the various options of motherhood in their career choices. I believe girls today should be made aware of the range of ways to be mothers: together with a big career, a mummy-track career, a part-time career or a career on hold for a decade or so; or indeed consider seriously the choice not to have children at all.

My one wish for graduating classes of 2007 is that as girls listen to the empowering speeches, they will hear an acknowledgement of one uniquely female choice that may lie ahead on their path: motherhood.