Category Archives: Stakeholder Management

The Next Two People You Need to Start Up Your Startup

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Business leader and team

It’s a lot easier to figure out the startup puzzle when you have the right team!

By: Andrew Johnson, Ph.D.

It seems that every week there is an article or post that bemoans the shortage of innovation in America.  However, this is not due to a lack of great ideas and the pace of discovery in the labs across the nation.  The problem is getting the right team to lead and to grow these ideas into commercially successful endeavors.

Don’t go it alone
Having an exciting technology or scientific discovery on hand is not enough to form a successful company.  You need a team of talented people to help you realize your vision.  However, going from one person (you) with an idea and a passion to assembling an effective team and moving forward can seem daunting.  The answer to this is not complicated.  The first thing you need to do is assemble your first board members.

Who are they?  Early Advisors vs. Active Board
Whatever you want to call them, you need others to help you take your idea to the next step along the way to a successful company.  The best way to begin is to gather a small, but powerful group of people that you can rely on to help you develop a realistic strategy, identify productive tactics and complete the critical efforts needed to get this off the ground.  You will find that there are many that will be more than happy to become advisors but far fewer that will become valuable board members.  You need both but you need the active board member more, especially in the early days when this is still an idea.  Here are a few ways to distinguish the two types of people: Table of advisor traits

Your board may typically only have 2 or 3 other members in the beginning which is fine.  You will likely have significantly more advisors at the beginning but some of these may migrate over to the board member column as things progress.  Your advisors allow you to get a breadth of guidance and ideas and your board will provide the depth you need to sort through all of the ‘suggestions’ and actually help you with the heavy lifting of launching your new startup.  In addition to this, it is a lot easier to share the burden of this effort with a committed team than shouldering it all by yourself.

Next Steps:

      1. Identify 10 people who have the experience, resources, talents and connections you need and ask them to be on your board.
      2. Schedule a kick-off meeting to discuss your ideas with them and to identify what commitments you might need from them.
      3. Agree on a regular meeting schedule
      4. Parse this initial group, using the table above and your intuition, into Active Board Members and Advisors.
      5. Continue to recruit until you have at least 2 – 3 board members.

Picture Credit:  © Suravid | Stock Free Images & Dreamstime Stock Photos

The Startup Business Plan: Charting Your Path to Success without Wasting Time

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Treasure Map

Your startup business plan will be like a treasure map to show you and the team the shortest path to the gold while avoiding dangerous traps.

By:  Andrew Johnson, Ph.D.

It might seem trendy to ‘just do it’ but it is pretty difficult to make sure that you are ‘doing’ the right things if little forethought has gone into what is critical for your company’s success.   There are those who propose skipping this step, calling it a waste of time.  The reasons given are that as soon as the plan is ready it is already out of date or “we know what we need to do already”.  Many of these views come about from a misconception of what a business plan really is and what it can do.

A business plan is…
A good business plan gives founders the opportunity to clearly state and communicate their vision of the company with the rest of the team,  investors, key opinion leaders and other VIP’s that are critical to the success of the company.  The founder, his senior team and trusted advisors will be able to use the exercise of preparing a solid business plan to simulate how the proposed company will ultimately achieve success.  Think of it as a dry-run.  Gaps in the business model, feasibility issues with the underlying technology, manufacturing scale-up issues and other key elements that are critical for success will easily be uncovered during this effort.  Since this is essentially a simulation of how you envision things to go, any gaps and pitfalls can be identified early before any time, effort or money is wasted.  In addition to this, the business plan will allow the senior team to get valuable feedback from outside industry experts that will have a direct bearing on the company.

A business plan is not…
Having a clear understanding of what does not constitute a good business plan will not only help you in the preparation of the right plan for your organization but allow you to avoid wasting time.

  • Needed only to attract investors:  Yes, it is true that most investors will insist on reviewing your business plan (often they only read the executive summary) before deciding whether they have any interest in a further relationship (never mind making an investment).  However, the real value here is that you will have a detailed strategy mapped out to guide your progress and even a detailed task list for the team.
  • A long, boring document for ‘business types’:  Nobody wants to read or review anything that is boring or valueless.  If you can cover all of the essentials of your business in 5 pages then that is how long your plan will be.  In fact, it is better to start with a shorter plan in the beginning and then amend it as you make progress and learn more about the things that are most important for your success.
  • A static document:  The preparation of a business plan it not something that you complete and then file away for posterity.  It should be a living document that changes as your company grows and as market conditions that impact it are uncovered.  The key here is that with a good plan in place, you and the team will make conscious decisions to make a change rather than just changing course every time something new comes along.  A business without an ‘Evolving Business Plan’ is doomed to run out of time and money by constantly chasing issues that really should be ignored.
  • Something that can be outsourced:  Some of the hard work here can be defrayed by hiring an experienced consultant.  The founder and the senior leadership team will need to work closely with this ‘hired gun’ to make sure that the final product is a business plan that will drive the success of the company rather than a generic business plan (a true waste of time and money) that has little to do with the particulars of your company.

Spending your time creating the world’s best business plan is a waste of time and money
You don’t need the world’s best business plan.  You need the business plan that will provide you with the details and guidance to chart your company’s path to growth and success.  It should be no longer than that and it need not be fancy looking or printed on heavy bond, acid-free paper.  Spend the quality time you need with your leadership team (and consultant if needed) to draft up the best plan you can in a week or less.  You will need to keep updating it and filling gaps but get at least a reasonable one in place early.  The leadership team will frequently make changes to it as progress is made and new findings are uncovered.  Someone with expertise in creating effective business plans can be a great asset to your team in terms of creating a version of it that will be most appealing to potential investors in your market.

Take Home Points:
You need a right-sized plan to help you avoid wasting time and money and…

  • Avoid creating a great product that does not have a ready market
  • Discover that a huge need in the marketplace does not have a viable business model for growing a profitable company
  • Identify what  the next most important tasks are
  • Reveal underlying risks and opportunities that may not be obvious at first

Resources:

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The Impact of Information Technology on Conflict Resolution

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art illustration of boxers on a ring

Successful negotiation is not about beating the other guy, it’s about winning together!

By:  Michael Kaiser

It is an accepted truism that conflict is part and parcel of human nature, and just as is the case with military and diplomatic conflicts, the business community is not free of conflicts both internal and external, some resolved and some not.

Of course the impact that business executives or employees experience when they fail to resolve a conflict with a partner or clients does not compare with the most feared and violent form of conflict: war.

Conflict resolution in the business sphere is complex for the same reason that a diplomatic one is, namely: negotiating an agreement that is acceptable to the disputing parties requires a give and take disposition from both sides.

In the early 1980s Roger Fisher and William Ury of the Harvard Negotiation Project released their book “Getting To Yes. Negotiating Agreement Without Giving In”. In it, the authors explain that the reason we negotiate is to get better results than the ones we would get without negotiation; they coined the acronym BATNA (Best Alternative To a Negotiated Agreement) as a standard that should be the measure of negotiations. Some of the key points of the BATNA are summarized as follows:

  • Separate the people from the problem
  • Focus on interests, not positions
  • Establish precise goals at the outset of negotiations
  • Work to create options that will satisfy both parties
  • Negotiate successfully with opponents who are more powerful

The last point merits special attention because it is in line with our IT-intensive society and its impact on the conflict resolution process. For example, consider the perceived advantage of what is known as Information Asymmetry, the Condition:

“… in which at least some relevant information is known to some but not all parties involved. Information asymmetry causes markets to become inefficient, since all the market participants do not have access to the information they need for their decision making processes.”  InvestorWords.com

That perceived advantage is a rather ephemeral one because:

“With increased advancements in technology, asymmetric information has been on the decline as a result of more and more people being able to easily access all types of information. Information Asymmetry can lead to two main problems:

1. Adverse selection- immoral behavior that takes advantage of asymmetric information before a transaction. For example, a person who is not in optimal health may be more inclined to purchase life insurance than someone who feels fine.

2. Moral Hazard- immoral behavior that takes advantage of asymmetric information after a transaction. For example, if someone has fire insurance they may be more likely to commit arson to reap the benefits of the insurance.”  Investopedia

It can be argued that the easy access of information via the internet, the use of cell phones, e-mail, teleconferencing, etc. has adversely affected the conflict resolution process inasmuch as the more personal face-to-face negotiations of the 1980s have been replaced by a plethora of IT applications.

The BATNA approach is not completely obsolete and can still be of use in some cases where an opposing negotiator makes a final offer to resolve an existing conflict with an unexpected demand based on relevant information (i.e., information asymmetry) only available to him/her. But, surprise, now the other party that may have been perceived as weaker is no longer forced to capitulate on the spot; instead he/she would pick their iPhone, android or iPad, connect with their legal or financial advisors, and regain transaction equality by means of information technology.

A final advisory:  current data mining and acquisition technologies significantly abbreviate and/or accelerate the “Go/No Go” factor in a negotiation process, be that in politics, real estate or the life sciences, but can never replace the instinct and creativity of the human mind.

Picture Credit:  © Zeelias65 | Stock Free Images & Dreamstime Stock Photos