07 Oct October 7, 2019 – Outsizing Steve Coughran, Lenmo Mark Maurice and Your Media Diet Jodie Jackson
Steve Coughran – Founder of the Coltavar, Keynote speaker and Author of Outsizing: Strategies to Grow Your Business, Profits, and Potential – Read interview highlights here
You gotta have the mission, vision, values, but you also have to define the advantages of the company and how you’re going to convert those advantages and monetize them for both your customers and for yourself.
Steve Coughran is CFO of an international billion-dollar company, and a management consultant. Steve has over two decades of experience driving business excellence. Known for his extensive research and writing on strategic growth and corporate financial management, Steve challenges conventional wisdom, earning the reputation of an “energetic trailblazer.” He is an expert on strategy and an acclaimed keynote speaker. Steve has launched and managed three cross-industry companies, gaining a deep understanding of the competitive business environment. He is passionate about spreading his knowledge of strategy and finance with others, developing and leading programs such as the Strategic Financial Leadership Academy and Growth-Driven Leadership. His new book, Outsizing: Strategies To Grow Your Business, Profits, and Potential provides six practical, research-based steps for leaders to take to design and implement their strategies to achieve extraordinary results.
Mark Maurice – Founder and CEO of Lenmo
We provide all the services associated with the lending, but we believe that when we are not involved in the lending itself, we will provide better service for both the borrower and the lender.
Mark Maurice is an Egyptian-born Ph.D candidate who transformed his study surrounding financial services solutions for everyday people into a platform called Lenmo. It’s a money marketplace gaining traction by connecting everyday people with potential borrowers looking for loans in small amounts. These loans average $350, and are at rates significantly lower than the ones offered at payday loan outfits and other legacy institutions, helping reduce the $141B consumers spend annually in fees and interest rates in the market. Mainstream financial institutions have left entire communities behind, leaving many with limited choices to borrow and/or invest their cash. Lenmo is an alternative to these options that fail many people. The platform has quickly risen in popularity, serving as an investor-to-borrower marketplace that streamlines investment opportunities and opens access points to money.
We have a mantra in the newsrooms that says ‘If it bleeds it leads’ and the problem with this is that the news is not a reflection of everything that goes on. It’s actually a reflection of everything that goes wrong. The news reports on the worst stories and it magnifies them. As consumers this becomes all that we see.
Jodie Jackson is an author, researcher and campaigner. She holds a Master’s Degree in Applied Positive Psychology from the University of East London (UK) where she investigated the psychological impact of the news. As she discovered evidence of the beneficial effects of solutions-focused news on our wellbeing, she grew convinced of the need to spread consumer awareness. The current negativity bias in the media and what it is doing to our mental health and world views needs to be understood. Jodie’s research suggests that it is important for our wellbeing to have a balanced media diet and she believes news organisations should include news stories of solutions and progress as part of their narrative. Jodie is also a qualified yoga teacher and life coach. She is a regular speaker at media conferences and universities. Her new book is You Are What You Read: Why Changing Your Media Diet Can Change the World.
Highlights from Steve’s Interview
That’s the whole genesis of my book. There’s a lot of great strategy books out there. But what I found is that there’s good strategy books, and some of them get into mission vision values, and some of them will go a little bit deeper. But there are few books out there that are actually comprehensive, that include all the components. You got to have the mission vision values, but you also have to define the advantages of your company and how you’re going to convert those advantages, monetize them and actually capture value for both your customers and for yourself. You have to have a clear understanding of who your customers are, and how you’re going to create a great experience for them. Then there’s got to be a financial backing to the strategy, because if your strategy doesn’t lead to acceptable rates of return above your cost of capital, then the strategy will turn into a bunch of marketing garbage that’s difficult to execute and to monetize and capture value off of.
I was working with a company in the past, and when I went into their business and I first looked at their strategy, it was very heavy on the mission vision values, which is great. They had a very clear vision; they had their mission defined. Then they had some values of their enterprise. They would sit out, and they would create a bunch of initiatives. The company had about 85 initiatives that they were engaging in, in a year, and they would sign these initiatives out to different employees, and they would go and run with it. It was causing a ton of confusion. The senior leadership, they understood the mission and the vision, the values, but when it got down to the frontline workers, there was a lot of confusion and a lot of misalignment, and with the initiatives, people were just out there doing a bunch of random things that weren’t leading to better experiences for the customer. When I came in, and I was able to apply some of these principles of emphasizing, what we did is we first focused the strategy around the customer. I always talk about how values are important for a business, but the customer’s values are important. So if the customer values execution, if the customer values this education, part of the experience, whatever they value, it’s our jobs as business leaders to be able to meet those values and to deliver on those values. So understanding the customer was very crucial. We created customer types which identified the different types of customers there were. Then we had the advantages of the firm, they’re very innovative, they had a lot of digital processes which led to streamlining and more efficiency of the business. We identified these advantages. In order to monetize these advantages, and to actually make money off them, we educated a lot of their senior management teams on financial principles and how they can impact the finance of the business. Those are a few principles in my book, understanding the customer, identifying the advantages of the business, and then having this financial intelligence of how your actions, daily behaviors impact the financial performance of the company, is key.
There’s very few companies that have an absolutely wrong strategy. A company could be pursuing the wrong market, or they can have the wrong customer set that they’re pursuing sometimes, but on rare occasions, they are absolutely wrong, where most companies get it wrong is they forget key principles to this company. Companies I work with have these great strategic plans, but at the end of the day, it doesn’t have anything that mentions who their customers are, what their values are, how they deliver exceptional experiences to these customers, which I think is absolutely crazy. Other times when I think most companies get it wrong is when they’re good at the design of the strategy, but they lack the tools to actually execute the strategy. And that’s where strategy goes wrong.
The first step is humanizing strategy. What I mean by that is, you have to connect with the people who are going to be executing the strategy, and you got to connect with the people who are going to benefit from the strategy. Humanizing the strategy means empathizing with customers, and it means understanding who your employees are, and what kind of biases can slip into the strategy room and how to overcome those biases. So you don’t build a strategy and go off in the wrong direction. It’s understanding this human element, understanding what the inertia is in an organization, what can stifle growth and innovation. That’s the first principle.
In the chapter I talked about, I’ll break it down to one very specific part of the chapter. That’s overcoming the biases that come into strategy meetings. Most companies get together, and they have these strategy meetings. Somebody in the room will introduce a bias, which I call anchoring, they’ll come into the room and they’ll say, “Look, I have a great vision for next year. I think we’re going to grow from $100 million to $150 million. All the sudden, they just anchored the entire room. And now anybody who speaks up, if this person is charismatic, if they’re well respected within the organization, somebody may speak up and say, “Actually, I think we should pivot. I think we should reduce our revenue to $80 million, focus on these key pieces, and then accelerate growth in the coming years.” They would stand out, and they could be shamed in front of their peers. I think the application here is, there’s biases that exists, there’s anchoring, there’s confirmation bias, and there’s other types of biases that exist, that can throw a team off, and we have to be aware of it. I tell people when they’re creating strategies, you have to be able to overcome these biases. You can do that a number of ways. When you’re brainstorming, you can ask some people to speak verbally; you can have exercises where people just write things down quietly. There’s a lot of ways to introduce surveys to capture information and data before somebody comes in and anchors the conversation and you get a bunch of groupthink.
Number two is about powering customer centricity. What I mean by this is being absolutely customer obsessed. I think Jeff Bezos has been a great example of how he built Amazon around this customer centric culture. In the book I get into understanding customers and what they value. The best way to understand what a customer values is to ask them a big, bold, scary question, which is, what do you hate about doing business in the industry? Let’s just say I’m a contractor, I may ask the customer, “What do you hate about working with a contractor, any contractor?” And they may say, “Well, we hate change orders, and we hate schedule delays, and we hate the uncertainty, and we hate the bidding process.” Then you got to follow up that question with another scary question, which is even more scary. You say, “What do you hate about doing business with our company?” And they may say, “We hate the billing processes, it takes forever to get an invoice. It’s confusing, and it’s hard to have transparency with your organization, the way you report information to us,” and so on and so forth. Then you got to take these things that they hate. They need have to create strategies to mitigate against these hates. Because if a customer says we hate change orders, we hate uncertainty, we hate scheduled delays, and then you go off and build another strategy that said, “We’re going to disregard that. We’re going to just go build a strategy over here. And we’re going to build a digital strategy, because we think that’s what’s cool. And that’s what the future is.” Meanwhile, your customers are sitting back saying, “Hey, we said we hate scheduled delays, what are you going to do to mitigate that and create a better experience?” That’s where powering customer centricity comes in.
The advantages come from a few different sources. Number one, it could be a positional advantage where your business is located in a prime geography or at an intersection or whatever. So there’s positional advantages geographically or within a market. The next thing is that there’s other advantages. You may have some IP, intellectual property, that gives you a leg up on the competition or the last one is you have a capability advantage, maybe you have a strong network that’s hard to penetrate, or you have speed to market advantages where your team can execute and be very agile. Those are the three sources of advantages. When you identify your advantages, you have to identify advantages that customers actually care about, like you’re talking about with your friend in the painting business, or you think about Chick-fil-A. Chick-fil-A says, “We’re going to outfit our restaurants with two drive through lanes, and we’re gonna have people out there with tablets taking your orders, because we know that customers hate waiting in line. So we’re going to build a speed capability and build this advantage at our restaurants.” That’s really what step three is about, it’s understanding what your advantages are, and making sure those are advantages that customers actually care about, that are going to contribute to a better experience.
Number four is about converting these advantages into value. Converting advantages into value is all about earning higher than industry average profits. At the end of the day, that’s what strategy is about, it’s earning higher than industry average economic profits. Business could do that in three different ways. They can use your advantages to charge more, get a price premium, they could do it for less. They have some type of costs efficiency compared to their competition, or they’re able to scale and grow the business strategically. The last one is confusing, because a lot of people think that growth is just as good either way, but there’s good growth and there’s bad growth. But if you can scale your business where your costs continue to decline, or they stay constant, then you have a good growth strategy. So businesses that can use their advantage to capture value in one of those three ways, or a combination of those three ways, will earn higher than industry average economic profits, which will allow them to invest in more innovation, they’ll allow them to invest in their employees and reward employees and keep top talent. And it just creates this virtuous cycle.
Number five is about unlocking the potential of your team. There’s a big war on talent in all industries, manufacturing, healthcare, retail, construction, all these industries have this huge labor shortage. And we have to invest in our talent, and investing in our talent means providing great coaching, mentorship, and providing them with opportunities to strengthen their knowledge, their skills, and providing you with the tools to be successful. In principle, number five is about working with the potential of your new team, so they can go out and execute on their strategies successfully.
Number six is developing patterns. We thrive on patterns as human beings. It’d be crazy if we woke up every day and we had to establish a whole new routine or pattern in our lives. We’d be confused. We’d waste a lot of time and a lot of mental energy. But instead, our brain’s been wired to act in patterns, and the same thing is true in business. This is really where I tie everything together from the five previous principles into a framework where companies can establish IARs, which stands for initiatives, actions, and results. This is the framework by which companies execute and create alignment and accountability within their organizations: initiatives, actions and results.
You can’t get it wrong if you start off and you’re rinsing and repeating. You start off, you create a strategy, you pursue some initiatives, you start building out your advantages, you started delivering great experiences to customers. And then you’re going to realize where the flaws are in the strategy, or where weaknesses are, and you adjust and you continue to measure and then you repeat, and you create this build, measure, learn type cycle in your business. That’s where execution really starts becoming successful.
Follow me on LinkedIn. I’m very active on LinkedIn, so you can connect with me there. You can go to SteveCoughran.com, and that’s where you can find more information on my speaking and my book or find it on Amazon or all the major retail sites.