Leadership to die for, or kill, possibly

Leadership will be a subject we’ll come back to, but one small anecdote from the Executive Leadership Forum (ELF) for now to illustrate what we’ve been up against.

The ELF meetings were theoretically monthly but in reality more like bi-monthly due to them having to be called by a CEO whose sense of time and place was different to the rest of the world’s.  I was an attendee at the ELFs for a while, before I fell out with the other woodland creatures (another story).

One particular ELF was distinguished from the others by the sheer length of the contributions of the financial representatives.  This was partly because their figures made no sense and were self-contradictory, and this needed to be explained, and partly because we were leading into a period of seeking external finance (though I appreciate this has always been true of Loftex) and contradictory figures tend to be anathema to city whizz-kid financiers.

Our then CFO, Chuck, had already spent 20 minutes over a fuzzy telephone connection explaining the arcane detail of his numbers to us when our then global ELF chairman, Fred, interrupted him.  

‘Chuck, help me out here, I’ve got September revenues as 80 on your 1st spreadsheet but on your second…’

‘The second one is the right one, Fred..’

‘.. on your second I’ve two different September numbers, 77 and 89, and I’d just need to understand which…’

We then had ten further minutes of explanation where Chuck appeared at one stage to be blaming a bug in Excel (but pulled back and ultimately, as far as I recall, went with overwork and fatigue as the root cause and the mean of the presented three numbers as the answer).

Now it was my turn, and brain spinning as I tried to get to grips with the new numeracy of the e-economy, I started talking through sales projections.  Let me be the first to admit my ability with sales forecasting is akin to my ability with weather forecasting or in fact any forecasting involving items less predictable than, say, the rotation of a planet.  So my sales forecasts were then and are now very much to be treated with caution.

However, at this particular juncture we were working with a (regrettably now abandoned) set of disciplines which allowed a sale to be forecast pretty much only if it had already occurred.  This had markedly increased the accuracy of sales forecasting while (strangely enough) decreasing the value of the forecastable pipeline.

So (and you may think this is more about terms and definitions than any kind of business reality, in which case I’d have to ask you to bear wth me and understand that for some of the participants here those terms are not differentiable) we now started to dig into the non-forecastable pipeline, where of curse all the sneaky little items we used to treat as forecasts were now hiding.  Fred started quizzing me on these items, when he could find them.

Fred had joined us a year or so earlier as our man in the US, but more than that, our representative of senior corporate wisdom (hey, wasn’t that me some time back?), the man who would bring us $US10 million in sales via his heavy-hitting network, a voice of pragmatism for the ELF and other senior fora, and (you’ll never guess) a significant investor.  Significant investors could gain that status by putting in more than anyone else or by putting in the same amount but when we were more desperate.  I never found out how Fred got his status.  

Fred was getting cross, or as the Americans like to say, ‘pissed’ (and we all wanted to get that way now as it was past six p.m. in our timezone), because of my forecasting or lack thereof.  I sallied with what I thought he wanted to hear – a whole bunch of ‘maybe’ opportunities that came to several million pounds, with a bit of detail on each.  Wrong move.

‘Do you think any investor worth his salt is going to let you get away with a sales forecast as woolly as that and financials that are as imprecise as you guys have here?  You think investors will be fooled by this shit?’

It went quiet round the table.  We were probably all thinking the same thing. 

‘Well you were, Fred’. 

 

Best and brightest

Recruitment policy for Loftex was probably the key to understanding our profit growth curve, or lack thereof.  Our own egos of course prevented any of us detecting the problem before it was well too late.

It went like this in my case:  Barry Foeliou and I had lunch at a pleasant but not hugely expensive Italian restaurant (at his expense) then drinks in an utterly over-priced London hotel (at my expense), during both of which I was complimented on my wisdom, my depth and breadth of experience, etc. and it was made clear that Loftex without me would be a slower-growing and (ultimately successful, but) less profitable beast.  With me on board clearly the world would soon be bashng our door down.

At this point clearly I can name my price and define the dimensions of my private office, but then (signal violins playing mournfully), the small problems currently preventing world domination have to be addressed, and number one is cash.  This is such a trivial thing its hardly worth spending time on, and clearly this time next quarter we’re not going to have any such problems, we’ll laugh at these times, but for just now could I, as a man of substance and honour, see my way to…

Now you can see where this is going, and now so can I, but at the time I wanted to believe this man with such judgment that he knew me for the substantial wise man I knew myself to be.  Where it ultimately went was six months work for no salary then a ‘reduced’ or ‘sacrifice’ salary which funnily enough I’m still on three years later.  In exchange of course I have equity.  How much equity used to be something I cared about – i.e. I’m sure I was promised 50 grand’s worth, which when it materialised was 25 grand’s worth.  Whatever, the souvenir value of the scrip (surely the only residual) won’t be much different for either.

Lest you think I was an isolated hire, lets review:  of the 12 European hires since I joined all but three have invested prior to being offered a job.  Those three were for jobs we actually needed doing.  These lucky investors didn’t have to go without pay as I did, instead they just handed over cash, which has continued to be an irritatingly rare item in and around the Loftex empire.  None of these investor/employees, yours truly included, is doing a job at Loftex for which he or she is specifically trained, qualified or has experience in.    

Now I didn’t see this as a problem in my own case as my talents, drive and intellect would overcome anything so trivial as not having done the job before.  How difficult can sales and channel management be, after all?

I did start to see it as a bit of a problem with a couple of the other guys, mind you.  Especially when they started to criticise the way I was fulfilling my role.

By then, of course, it was a bit late. 

Disruptive technologies and how to avoid them

Life at Loftex4 goes on but only just. We continue to pretend we’re:

a) about to beat our competitors in one or more of their favoured market niches. All of them (competitors) have more money than us. The boy I buy a paper from each morning has more money than us. They also have better software, salespeople, channels, colour schemes on their brochures, etc.;

b) on the brink of the paradigm-shattering technology-led world media announcement breakthrough which, given a zero marketing spend, would indeed be worth writing about;

c) not trading while insolvent.

Maintaining these self-delusions was easier when we were getting paid. Let me re-phrase – we’ve always been paid something, and never been paid all of what we’re due, or on time. So what I think I mean is when we were getting paid slightly more completely than now….. anyway the self-delusion is wearing off and the restlessness of the natives is palpable.

Even Finglass, previously noted for his gullibility, lack of technical nous and general good-chappishness, has become distinctly miltant of late. When Barry Foeliou’s demise was announced he led the cheering, but was also first to ask – ‘so how does this affect the likelihood of my overdues arriving?’. Funnily enough the answer seems to be not a lot.

The scent of blood has alerted the others, as well. No-one believes anymore this will be running at Christmas. Maybe we’ve been disrupted by our own technology? Tomorrow in theory I’m meeting with the party from whom we acquired some of the more disruptive parts of the technology, and certainly they’ve had their own problems paying bills, so maybe that’s part of the answer.

How we got here I’ll be documenting in more-or-less libellous episodes on this blog, plus obviously keep up to date with future developments. Don’t expect many of those bar a death rattle or two, mind…

 

 

1st up

Flocking around with some new tools. So far, so entertaining

Getting the money in

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