Came across this excerpt from a book that I’m reading. The comment was in reference to some of the decisions and the decision making process that high growth CEOs face.
“CEOs should not play the odds.
When you are building a company, you must believe there is an answer and you cannot pay attention to your odds of finding it.
You just have to find it.
It matters not whether your chances are nine in ten or one in a thousand; your task is the same.”
It couldn’t be more true.
Observations and learnings are key when building a business.
For those that don’t know the Demographica story, we have gone through a fundamental restructure of the company business model. The entire restructuring process took roughly 6 months and we were operating within our new structure from the 1st of November 2013.
Today we’re roughly 8 months into our new structure and there have been some incredible observations which I think are well worth sharing.
Observation 1 – Our strongest employees have bought into our new vision.
During and after a restructure, it is normal to have a high level of staff turnover. A big reason for this is that the company is now a different company to the one your staff had initially signed up for. People leave companies for various reasons but if an employee kept his/her job during the restructure and then decided to leave voluntarily afterwards, the reasons are generally that the employee has not bought into the new vision of the company. There’s nothing wrong with that, but it’s better for everyone for them to leave.
As an employer, I believe that you owe it to the employees that have bought into the new vision to surround them with colleagues that share it. Poison spreads fast – so be mindful of it.
Observation 2 – Make decisions around your clients.
Advertising agencies like Demographica live and die by the quality of their clients and the work that they do for them. We know that if we grow our clients businesses then we grow our business. It’s a symbiotic relationship and anything less than that is not sustainable.
We are very specific about the clients that we retain. Unless we know that we can consistently grow our clients businesses, we do not pitch for the work. To take this a step further, we have resigned clients that we don’t share values with and have resigned clients that don’t take their work as seriously as we do ours.
Observation 3 – There is no substitute for efficiency.
Restructuring Demographica from a 7 year old media owner to a newborn Direct Marketing Agency is literally starting a new business. We’re a startup again and startups require an immense amount of work!
I’ve discovered some productivity and efficiency tools that we are using now and it’s proven to be the game changer in our output. I estimate that we are over 200% more productive in the same amount of hours – no exaggeration. I firmly believe that Demographica’s recent windfall of new client wins is solely down to the significantly increased efficiency levels of our sales team.
Lastly, Observation 4 – Success breeds success.
One of my business partners Mark Levy says this to me all the time and I’m watching it happen right in front of me.
We pushed hard in our new structure to secure some strategic client wins. In a startup, you have no history on what to say to clients, how to tailor your pitch and how to close the deal so you are completely reliant on gut, passion and drive. As soon as we had our first client win, another one came in soon after and another one soon after that. Everyone at the company gets a lift because the reasons to restructure finally become validated and the morale booms!
The life of an entrepreneur is full of lessons, I literally never stop learning. Today I learned some great lessons which I think are well worth sharing.
A year ago, one of our top sales people did an advertising deal with a company, a first time client. Demographica is an advertising business and this particular deal was not out of the ordinary. The deal was for a large sum of money and we were pretty excited about it. The campaign was executed and the results were fantastic – the client was actually so happy with the results that they wanted to extend the campaign and book a few more.
When the sales person came to chat to me about putting together another campaign for the client – I asked her to please ask the client to settle their bill and once settled, we will gladly run more campaigns for them.
A year later, we were still chasing them to pay the invoice.
About 3 months ago, I asked our financial manager to get in touch with the clients CEO and try work out some payment terms with him. Their CEO was completely ‘unavailable’ and eventually the CEO’s assistant came to chat to our financial manager. They agreed to settle the invoice in 3 equal monthly instalments with the first instalment due at the end of April 2013. After the meeting, the CEO’s assistant sent us an email confirming the terms of the deal.
This morning, Demographica’s financial manager and I were going through our management accounts and I noticed on the debtors control account that this client still owed us the full amount and had not paid the first instalment.
I was angry. I was upset. I was disappointed.
I suggested to our financial manager that he and I should go down to the clients office right away and see the CEO to talk about the money owing. We got in my car and took a drive.
We arrived at the clients swanky offices in a really upmarket part of Jozi and requested to see the CEO. We were told to wait in the boardroom and that they would check if he was available.
In the boardroom, there were pictures hanging on every wall. Each picture had the CEO posing with a different government minister right up to the president of South Africa. Already I had some insight into the character I was dealing with. He also had numerous business certificates and awards lining the walls.
After 30 minutes the CEO had still not joined us in the boardroom. I walked out the boardroom and recognised the CEO from the pictures, standing in the hall, and confronted him. I shook his hand, introduced myself and asked him about the money that he owed us.
A physical altercation then occurred.
I’ve removed the details of the altercation out of this post because they are simply not necessary. This post is about the lessons learned, not what actually went down at his offices.
We both left his office immediately after that.
After doing some research on the CEO after the incident, it turns out that although he is a very successful businessman, he has a colourful history of law suits and controversy. His companies were at the centre of huge public interest scandals and he himself has appeared in numerous respected business magazines exposing him for his behaviour.
He is a thug.
This is what I’ve learned after today’s ordeal.
I love learning from other entrepreneurs. The other day, I learned a lesson from an entrepreneur that I have massive respect for.
First, some context.
Demographica and his company are in the early stages of doing some work together. We have a new product that he likes and he has a hugely successful business with some clients that our new product would connect to perfectly.
Like all shrewd businessmen, he wanted to do his research as well as totally understand the structure and various applications of the new product – in order to do this, he needed conversation time with me. Over a period of 3 days, he called me 6 times, sent me 5 sms’s and we exchanged about 4 emails – that’s a total of 15 conversations in 3 days.
Not for one second did I feel ‘hounded’ or ‘pestered’ by him – in fact, he made me feel that he genuinely wanted something to happen with this new product of ours and his authenticity and tenacity was something that I admired. Bottom line – he made me want to do business with him – because I felt that he genuinely believed in what Demographica and his company could do together.
A few days later I asked him about his deal making style, and he introduced me to a concept that his company uses internally – it’s called ‘Dogfuck’.
I googled ‘Dogfuck’ and you can imagine what it showed me.
He explained to me that when a dog wants to mate, there is nothing that will stop that dog from mating. You can hold the dog back, you can push the dog away, but at the end of the day – the dog will mate!
When they interview potential employees, there is a rating on the HR form whereby the interviewer rates the interviewee on a scale of 1-10 on his/her level of ‘Dogfuck’.
The lesson here is clear – potential customers will knock you down, reject you and give you a million reasons why they wont meet you or buy your product or service – but the deal makers with a high rating on the ‘Dogfuck’ scale will eventually close the deal.
Here are three lessons that we have learned whilst starting Demographica.
The take away from these lessons are that being resilient is key to sustaining a startup.
Here is the definition of the word ‘resilient‘.