I’ve decided to split my last post in two.  First the hall of fame:

Thank you to the 48,000 people in 183 countries reading what I had to say.  Here are the top readership nations:

1. New Zealand (~46%)
2. USA
3. UK
4. Australia
5. Canada
6. Philippines
7. India
8. Germany
9. France
10. Singapore

My most-read original articles

1. The importance of algebra (It’s become a teachers’ training course reference!)
2. Burgerfuel? No thanks
3. Time to get going
4. Xero IPO update
5. Great design from 1843 - Brunel’s SS Great Britain
6. The difference between rules and principles
7. SaaS pricing for enterprise customers
8. Von Manstein’s 4 Officer Types - adapted for managers
9. Telstra Clear does its best to lose my business
10. ANZ Bank rebadge?

My most popular business tips (no particular order)

• Good strategy is making choices and meaning it
• The difference between rules and principles
• Just do it!
• Keep it simple, stupid!
• How to deal with takeover rumours - don’t
• The trouble with superheroes
• Strategy and people
• Open and honest? If you say you are, you’d better be
• Trust, confidence and delegation
• Business success and dark moments
• The product manager’s challenge
• Don’t blame it on the computer
• 10 rules for alligators and swamps
• Product development - don’t be trapped by perfection
• New good business won’t fix old bad business
• Managing managers - why companies plateau
• The importance of knowing how you make money
• Business success and ironing boards
• Strategic thinking with Rudyard Kipling
• The power of NOT thinking

My best two bob’s worth

• Strategy lessons from the industrial revolution
• The importance of algebra
• Exports are not enough!
• Get rid of public holidays
• The myth of the telecommuter
• Carbon emission trading schemes - a gas factory in the making
• Your industry can’t attract staff? It’s up to you to solve the problem

Most-read non-original articles (shameless cut & paste)

1. The sweet spot
2. Does your IT shop look like this?
3. Logo evolution
4. Crazy salesman
5. The gingerbread haka (which offended some people, but more just enjoyed it as a bit of silliness and meant no offence)

Most-read pages

1. The home page (well of course - you read everything in sequence)
2. The sweet spot
3. About
4. Does your IT shop look like this?
5. The importance of algebra
6. Logo evolution
7. Time to get going
8. The best business book title award
9. Burgerfuel? No thanks
10. Category/Brunel

As a CEO and a director, I work hard to maximise the value of my shareholders’ ownership in the businesses I lead. It’s a lot easier if you’ve got informed shareholders.

In a cafe recently, I overheard a woman loudly discussing the merits of the local share market:

‘I only buy shares in local companies listed on our share market. I don’t want my money going overseas. I want it used to grow local businesses.’

Putting aside the desire for local ownership (whether based on patriotism or a preference for businesses you can easily monitor), I think she’s confused owning shares with funding companies. The person who sold her those shares may use her money to repatriate funds offshore, or to invest in an offshore company, or maybe to reinvest locally. She has no way of knowing or influencing that.

Unless she buys shares in a new share offer, not one cent of her money will go to the company. The company got its money when it issued the shares to the person who bought them the first time. It gets nothing when someone else later buys those shares from the first or subsequent owners.

I mentioned this to my companion, who admitted that he thought of his investments in a similar way - ‘giving the company my money’ - when in reality he always bought shares in established listed companies, and so had given the company nothing.

Clearly, when you buy shares in a company, you buy a piece of the ownership of that company, and you rightly expect the company to look after your ownership stake. But unless you put in new money for new shares, all you’ve done is acquire someone else’s ownership stake - at whatever price you, not the company, decided - and you have not given the company any money to grow.

CIO Magazine has an article with a familiar story. After acquiring several other companies, the group’s CIO tells an IT manager to integrate 3 core work-order IT processes onto one common platform. The manager’s dilemma is whether to be dictatorial or to build consensus on which system to use. Which system did the users seem to like best and why? He didn’t know. He’s on a hiding to nothing. Unless their system is awful, each system’s users will eulogize their system and hate the others. Someone will have to make the tough call, and the users forced to change will hate the decision anyway. The suggested solution: tell the users the problem and give them 2 weeks to make a decision or they’ll have it done for them. It’s a technique I’ve used often when factions emerge and it usually works.

But why was the company in this position? Some key questions seem not to have been answered during pre-acquisition analysis, due diligence and planning:

• Is the acquirer’s system compellingly better, and expected to enable superior performance from the acquiree business?
• Is the acquisition being done to acquire the other team’s smart IT applications, which will enable superior performance from the acquirer’s business?
• Is integration of IT systems (with lower operating costs) a key value driver for the acquisition?
• Is there a clearly compelling and obvious case for one system over another?

If the answer is yes to one or more of these questions, there should have been a plan in place before the deal was finalised, with rapid implementation begun immediately after acquisition. Otherwise, don’t bother, until normal life-cycle replacement kicks in, with the users involved.

Pre-acquisition planning applies not only to IT, but to every aspect of an acquisition (marketing, development, sales channels, fulfilment, management, culture, organisation, support, etc.). What are the big value drivers that prompted the acquisition? Plan to get them realised quickly after acquisition and then get on with growing the businesses again. Too much navel-gazing will destroy the acquiree and be a huge distraction from achieving the value benefits from the acquisition.

I suggest reading ‘Five frogs on a log’ for executives and managers involved in pre- and post-acquisition planning and execution. Its primary advice? Plan the integration before you finalise the deal, and don’t kid yourself or the other team. Unless making a strategic pre-acquisition decision to take on a particular aspect of an acquiree, it’s the acquirer’s way that wins. It’s simpler, quicker, less painful and more honest.

I was at a stock exchange function last night, for a very good presentation on the role of directors in takeover situations. Afterwards we chatted about those rumour questions we all get from time to time:

• Is it true that you’re taking over XYZ?
• Is it true you’re being taken over by XYZ?
• Is it true that the business is for sale?
• Is it true that you’re about to make an acquisition?

A lot of people fall into the trap of issuing an emphatic denial when there is no truth to the rumour, but fudging when there is some substance, and in effect confirming the rumour, which might have disastrous consequences.

The best way to deal with rumours like that is to say nothing - always and consistently. Do it right from the start. I get approached at least once a month with some question about us acquiring another business or vice versa. My answer is always the same:

‘It’s our policy to neither confirm nor deny such matters, and we apply this policy whether or not there is any substance to rumours.’

This gives nothing away, and it also says we follow this rule all the time - an important rider. I use a similar statement when asked by the media about our clients:

‘It’s our policy to not discuss any client’s business or their dealings with us, unless the client has given their permission.‘

In both cases, the answer is professional and honest. Most enquirers will respect you for giving such a clear, firm response. A journalist sometimes will try a second line “Well, if it’s not true, why not just say so?” Don’t be sucked into that logic. Just repeat your standard response. Then when you really do have a secret to keep, your standard response will be credible. This isn’t being devious or dishonest. It’s just that some things have to be kept confidential until the appropriate time to reveal them.

The BBC has reported on a row in Britain about a mobile phone designed for elderly users that no-one wants to sell. The Lifephone - from Austrian firm Emporia - has big buttons, easy to read characters, and very simple functionality. It’s probably a great product for its target market, and aged advocacy groups seem to agree. The problem is - selling stuff to aged customers with the primary message that it’s specially designed for for them rarely works, when it’s a variant of a product for the general population. Who wants to think of themselves as a doddery old duffer? It’s also patronizing and insulting. Most marketers know this, which is possibly why they didn’t take up the pitch from Emporia. The best way to sell a product like this is viral - promote the phone is a low key conventional way, but invest heavily in building a network of senior advocates who’ll spread the word to other seniors by word of mouth. Never tell them it’s an old folks phone, and make sure it doesn’t look like an old folks phone. Seniors like being cool, too.

I posted a while ago that ‘Good strategy is making choices and meaning it‘. As a CEO, I only do 4 things:

• Lead the development and execution of our strategy.
• Sell, communicate and report on the strategy and its progress.
• Build and lead the team to implement the strategy.
• Invest in the processes to execute the strategy.

Everything else is an outcome of those four tasks, whether it’s raising capital. developing and delivering a product, building a brand, reaching and serving customers, anything. The communication, the team and the processes must be consistent internally and externally with the strategy and whatever it is you offer the market.

Your strategy will define not only what products you will offer to which customers, but also how and why you do things and, importantly, how and why you won’t do things. You need a clear vision of your desired organisational ethos, values, modus operandi and style.

Sometimes that means changing an organisation in very drastic ways, sometimes it means changing one or two key individuals. Sometimes you do things quickly, sometimes gradually, but if change is needed, you’d better be doing it. And when you make a mistake in your people choices, fix it - decently, fairly and having done what you can to help.

For new businesses, of course, you have the luxury of starting as you mean to go on. Rod Drury told me that when he first started to think about his next venture, he knew exactly what kind of team and organisational culture he wanted. After all, he’d plenty of past experience to learn from. He’ll undoubtedly still make some mistakes - we all do - but hopefully those will be correctable through small rather than massive change.

Yesterday, someone asked me why I insisted on approving certain decisions - didn’t I trust them? It was a good question, to which there are two related answers.

One answer is about degrees of delegation and the trust and confidence I have in your skills, abilities and commitment. I prefer to delegate as much as I can, having regard for people’s skills and abilities - noting that it’s better to over-stretch and over-trust than under-stretch and under-trust. Some people can’t do that, but I try to. Usually people rise to the challenge, with coaching and support; if not, I correct the situation appropriately.

The second answer is about tight and loose control. I only want tight control (with consultation and buy-in) in a few key areas that set the context for everyone to operate as freely as possible. Typically these few key areas are:

• Our business vision and business strategy - development, goal-setting and implementation;
• Our overarching market offer, our brand, and our high level messaging to current and potential clients, staff, investors, partners, suppliers and key influencers;
• Our organisation’s values, style, and modus operandi.
• The appointment, promotion (and termination) of key people, which signals the tone for the rest of the organisation.

Sometimes I tighten up on areas of concern and poor performance - it’s all about trust and confidence. Don’t expect delegated authority if you put up daft ideas or you don’t perform. Why would I delegate to you? If you deliver or you’ve got a good idea, then you’ll get the tick and you can feel empowered - you’re building trust and confidence, and I can loosen up.

I can’t remember where I learnt about the concept of degrees of delegation, and it’s probably got mangled over time, but here’s my version:

1. I decide what to do, I plan how to do it, I do it. You admire the master at work.
2. I decide what to do, I plan how to do it and tell you, you do it and tell me what you’ve done, I decide if that’s ok. I’m the master - you work.
3. We decide what to do, you plan how to do it, we decide if that’s ok, you do it and tell me what you’ve done, we decide if that’s ok. We’re a team.
4. You decide what to do, you plan how to do it, you do it, you decide if it’s ok, you tell me what you think I need to know. I admire you at work.

There’s a lot of comment about the so-called new ‘openness’. Stephen in No Bugles, No Drums has an interesting post on the subject. Frankly I don’t buy most of the hype. You either do it or you don’t. If you don’t deep-down do ‘openness’ and ‘honesty’, you’d be better off not claiming otherwise - you’ll be reviled the minute you show your true colours. Openness and honesty have to come from deep-seated personal values that are lived and demonstrated.

Here are some thoughts on ‘Openness and honesty’ - much misunderstood terms :

• People respect circumspection when it’s done ethically and consistently.
• ‘Engage brain before opening mouth.’ Tact, diplomacy and good manners have a place in the world. You can state a criticism or a contrary view or express disappointment and frustration, without causing offence or compromising yourself. (I admit I find frustration challenging, and it shows!) Likewise, try to respect and protect other people’s dignity, especially in trying circumstances.
• ‘Neither confirm nor deny’ - a useful line in certain areas, but be consistent right from the start. If you squash a rumour when there’s nothing to it, and then say ‘I don’t comment on rumour’ to avoid the question when there is, everyone knows.
• Openness and honesty are two values deeply important to me, so when there are some things I can’t tell people, or least not yet (e.g. commercial or individual privacy, public financial disclosure, etc), I’m honest about it. My promise to people is ‘I won’t lie to you; I’ll tell you as much as I can, when I can; but I can’t tell you everything’.

Every CEO gets a nickname (no-one’s admitted to me yet what it is at Fronde) and I’ve had some good ones and some bad ones, like ‘Chainsaw’ - I’ve done a lot of restructuring and company turnarounds. Do you know the one I’m most proud of? When I was CEO of power company Electra, having laid off a third of the staff, radically restructured our various businesses, and outsourced a lot of in-house work, the linecrews in our Lineworks subsidiary (a very earthy bunch) dubbed me ‘No-shit Jim‘. It was a sign of respect, one which I appreciated deeply and one which, albeit imperfectly, I have tried to live up to ever since.

I’m amazed that Fisher&Paykel Appliances has waited so long to shift its NZ laundry appliance factory to Thailand. But although it’s sad to see NZ jobs lost, remember that this is in the context of F&PA having become a real global company. It is NZ-owned and its design and development capability, finance, strategy, supply chain and distribution channels are still managed out of NZ. We need more F&PA’s building global businesses headquartered here.

Here’s an OpEd piece I wrote on the subject several years ago for the DominionPost’s Infotech:

Exports are not enough
13 August 2001

“Export or die!” We have heard that message so often - and for many companies, it is the right message. Getting the world to buy a New Zealand product or service is an important milestone for a developing business. Lots of successful exporters are needed for a healthy economy - but they are not enough. The world’s most successful companies do not just export globally - they operate globally. That means having sales, service, logistics, production and development operating around the world. Look at the world’s greatest companies. How many do things only at home to ship out to the rest of the world? I can only think of one - Boeing. The others made the leap from exporting to international operations. Our own Dairy Board/GlobalCo (Ed. that’s Fonterra) has substantial and growing offshore development, procurement, manufacturing and logistics. More Kiwi companies need to recognise when to make that change.

Why? To minimise the cost of distance - freight, duties, foreign exchange risk and in-transit inventory; to reduce production costs, through greater volumes, lower material costs and lower manufacturing wages (an unpleasant reality); to get closer to customers for more efficient service and faster reaction to changing needs; to build critical mass for future investment; and to build credibility with large global customers.

I speak from personal experience. Deltec developed an advanced antenna technology for mobile phone networks - Teletilt - that enables network operators to adjust their cell coverage remotely and with improved signal quality. We began in New Zealand and Australia, explored SE Asia, and then expanded sales rapidly in China. Our products were key components of large infrastructure projects. We were the world leader in our niche. But as we grew and started to explore Europe and the Americas, our larger customers demanded the cost and service benefits of in-market operations. By mid-2000, we were getting a consistent message from global customers like Motorola and Nokia: “Set up full-scale sales, service, manufacturing and logistics in North America, Europe, China and Brazil. Do it now. Or don’t expect to get our business in future.”

The time had come to switch from a Kiwi exporter to a global business.

The capital requirements and the risks were large. Then the tech sector went into meltdown, and technology investors took fright. So we decided to sell. Andrew Corporation, a global competitor with complementary products and a similar vision for the future, recognised the value of Teletilt and our expertise. Our Wellington development facility will become their worldwide centre for developing advanced antenna systems. New Zealand will continue to play a key role in the technology. It won’t save the mainstream manufacturing, which would have gone to China eventually anyway, but we can reinvest in new opportunities.

My point is that New Zealand should not wistfully expect its companies to export everything from home. Global companies like Nokia, Vodafone, and Nestlé operate in many countries. The interesting thing is that large numbers of their high-value jobs are still at home- in development, marketing, and corporate administration. They are surrounded at home by a plethora of supporting organisations- in banking, IT, law, accounting, advertising, travel, short-run early-stage manufacturing, research, education, etc. Together, they bring home huge revenue and profit streams.

If New Zealand wants a high-value economy, it needs more than just exporters. It needs global businesses that operate offshore in all facets of their business. New Zealand should encourage its businesses to invest offshore, not deride them for it. Without global operations, we won’t get a Kiwi Nokia or Vodafone. With global operations, we look like getting a Kiwi Nestlé. We could sure do with some more.

PS. At the HiTech2000 Awards, Deltec won the High Growth Company of the Year Award, the Investing in People Award and the Supreme Award. When the tech-wreck got even worse, in late 2002, Andrew’s NZ R&D centre went too, but that could happen under any owner, and only validates my argument that we need our own global players based here. The home R&D is usually the last to go.

NZ writer and publisher Vicent Heeringa ( in Unlimited and now Idealog) has been one of the loudest cheerleaders for NZ entrepreneurs and companies. But in a recent article - On the Road to Nowhere - he takes a very different stance, castigating successive governments and the business community for a marked failure to deliver on our potential. He blames us all:

By far the biggest culprits in this decline are me and you. We just don’t notice that we are getting poorer. There is no widespread electorate pain driving calls for change that a government is forced to listen to. Perhaps if we had a common land border with one of the richer nations we’d be more aware that their roads are better, their schools better equipped, their houses flasher and their inhabitants healthier and more prosperous.

At Idealog, we see a steady stream of creative Kiwis with passion and clever ideas. They’re inspiring but they’re small in number. And a bit like the wine industry, no matter how sexy, clever and successful, it’s small beans in economic terms. Our national economic performance requires a national ambition.

It’s time for a coherent, united and urgent response. I don’t want my children to grow up in a poor country. Do you?

As usual for Vincent, this is not so much a criticism as a call-to-arms. Let’s not waste too much time and energy looking at what failures we’ve been, and instead get on the right road by identifying and building what we need to do to get back up in the OECD upper quartile (top-half just doesn’t do it for me). I don’t for a minute think governments can do anything other than provide a platform on which entrepreneurs, companies and people can build the future, but we haven’t got the platform yet. That needs big, bold leadership of a shared vision by industry, both sides of Parliament, our public service, our local bodies, our education system and our media. That vision can incorporate all those things that make us distinctively who we are (or want to be). A growth agenda can include our social and environmental aspirations too.

We need to get excited about the future and committed to making it happen. I’m willing to sign up. What about the rest of you?

I’m often asked to talk to groups and lead workshops for new entrepreneurs on strategic thinking. (I even get paid for it occasionally). In a nutshell, here’s what I say:

Clearly define your offer and how to fulfil it

• For the customer, investor, supplier and employee
• What, why, when, how, where, who?
• What not, why not, when not, how not, where not, who not?

Keep it simple

• Consistent, understandable, doable, communicable
• Simpler is easier, less risky, concentrates resources for maximum impact

Do it!

• Do the stuff you decided to do
• Cut out the stuff you decided not to do
• Fix problems before clearing backlogs
• Build the processes, organisation and style
• Put in place the people, resources and priorities
• Dedicate people to make change happen
• Measure, report and communicate progress on the strategy (up and down)

Think & act for greatness!

Simple, really. Any questions?

Everyone needs a hero - not because your hero is perfect, but because he or she has some admirable qualities or achievements which can inspire you to greater things. My hero is Isambard Kingdom Brunel.

Brunel was a 19th century engineer who built the Great Western Railway, the best railway of the times. He built the Great Western, the Great Britain and the Great Eastern - the largest steamships of their age. He built great bridges and tunnels. He made things happen, and his works still stand today as examples of innovation, design, entrepreneurship and execution. In an extensive national poll accompanied by in-depth BBC TV documentaries, Brunel was voted the second greatest Britain of all time.

Brunel seems to have always been around in my early years. My parents’ families lived near the GWR at Hayes and Hounslow (the local pub was called the Great Western). I studied Computer Science at Brunel University in London. My early career in the UK was at both ends of the GWR - near Paddington Station and Bristol - and Brunel’s constructions were nearby.

Brunel’s life story is as fascinating as his work. As I learnt more about the man, the more I identified with his sense of ethics, his egalitarian elitism (the subject of another post one day), his setting of grand goals (not just his works themselves, but why they were built) and his ability to achieve them.

This blogsite is titled after his personal motto ‘En Avant’ - which means “Get Going’. Anyone who knows my leadership style knows that I want to get things going, get started, start delivering value. It is no coincidence that I was a very willing sponsor when Fronde decided to really take on Agile Project Management and Agile Development (which I say is just En Avant brought up to date).

It will come as no surprise that my private companies are named after him. I have a small but growing collection of Brunel books, pictures, DVDs and souvenirs. My car number plate is ISAMBD (which has most personalised-plate translators completely stumped). I even have a life-size banner photograph of the great little man hanging on my study wall - the only place allowed by my family! Top hat, 3-piece suit, cigar, and muddy boots - what an icon!

Blame Rod Drury and Tapio Sorsa for this. I started reading blogs to see how our name change at Fronde had gone, and I found myself joining in all sorts of discussions. Rod was too polite to call me a blog-hog to my face, but I know what he was saying when I wasn’t there. Tapio thought it was great profile. Anyway, the consensus was that I should start a blog of my own, so blame them.

I intend this to be a business-oriented site, touching on topics like:

• General business thinking (strategy, marketing, leadership, operations, etc);
• Industry, trade and the economy;
• Technology business (rather than technology itself);
• Comments on my companies (that are relevant in a personal blog);
• People, places and practices I think worth noting (for better or worse);
• Articles, speeches, etc. that I want to share.
• Reviews and events in which I think you might be interested;
• Isambard Kingdom Brunel (you’ll have to read my posts for that one);
• Education (a particular interest of mine);
• Thoughts and ravings on concepts and issues that catch my fancy;
• Other stuff that might be relevant to a business blog.

This blogsite is titled after Isambard Kingdom Brunel’s personal motto ‘En Avant’ - which means “Get Going’. Anyone who knows my leadership style knows that I want to get things going, get started, start delivering value.

Thanks to Tapio, Mike and Andrew for getting this built for me. I don’t have a clue how it all works - but I don’t need to. Hey, I’m a ‘big picture’ guy! Isn’t technology great? Also, thanks to Unlimited magazine and Matt Grace for the flattering photo.

Again, welcome, and I hope you find it worth visiting and joining in the conversation.

Some background information on me

I’m the CEO of Fronde Systems Group Ltd, a leading NZ-based IT services business. We design, build and operate industrial-strength business transaction and payment systems which connect the world to your business and your business to the world. With around 200 professionals in Wellington, Auckland, London and Singapore, we plan to expand into Australia and North America.

Other current activities include:

• Owner and director of Isambard Ltd and Isambard Investments Ltd, my private companies. Venture investments include Surveylab and Compudigm.
• Non-executive member of the NZ Tertiary Education Commission, which is the principal funding agency for post-school education, training and related research.
• Talking on business strategy and related matters - which led me to starting this blog.

Previous activities include:

• CEO and co-owner of telecommunications equipment maker Deltec Communications Group (HiTech Company of the Year 2000, sold to Andrew Corporation in 2001).
• CEO of mid-size electricity company Electra.
• Strategy consulting partner at Ernst & Young.
• Several boards associated with the above companies plus economic development agencies and government taskforces.

Later on, I’ll post my CV and other background information.