Connect with us

Entrepreneur Profiles

Avoid The Founder’s Trap And Learn From Propertuity’s High-Impact Growth

This is how you take one small idea — to bring communities, development and businesses back to the inner city through an ambitious urban regeneration project — and turn it into a reality. Welcome to Maboneng, place of light, nestled in the heart of Joburg’s inner city.

Nadine Todd

Published

on

jonathan-liebmann

Vital Stats

  • Players: Jonathan Liebmann (founder and CEO) and Ricky Luntz (MD)
  • Company: Propertuity
  • Launched: 2007
  • Current property portfolio: R1 billion
  • Visit: propertuity.co.za

It’s called the founder’s trap, and it’s the hardest part of building a high-impact organisation: As the entrepreneur, there comes a time when you have to let go. You have to trust others (an exco, management team, and perhaps even an MD or CEO) to take your vision and implement it. You have to learn that truly scalable and successful businesses are built by teams. And you have to let those teams do what they were hired to do.

The entrepreneurs who have successfully transitioned from start-up ‘jack of all trades’ to visionary founders who rely on strong management teams for the day-to-day operations of their businesses include Elon Musk, Richard Branson, Mark Zuckerberg and Jeff Bezos.

Those who can’t — or won’t — make the transition, either continue to run reasonably successful businesses that are unable to scale, and will never be sold as assets of value, or they slowly stop moving forward, which is followed by irrelevance and eventually decline. Why? Because great businesses are built on incredible teams. That’s the role of the visionary leader, and that’s how business owners avoid the founder’s trap.

Related: Maboneng Precinct: Jonathan Liebmann

At the crossroads: From start-up to high-growth

propertuity

When Propertuity’s current MD, Ricky Luntz walked into Propertuity’s offices four years ago, he was greeted by the very definition of a lean start-up: Six people in a single, open plan office. No systems; no processes. There wasn’t even a bookkeeper.

At that point, Maboneng had already established Arts on Main, as well as a portfolio of residential buildings, a hotel and some retail businesses and restaurants. Founder Jonathan Liebmann’s vision was clear, and people were buying into it. They wanted to be a part of an urban city renewal project, to get in on the ground floor and be integral to the growth of a new community. Walking the streets of Maboneng, you could feel the buzz of energy and excitement.

This is what visionary entrepreneurs do. They take a dream and not only turn it into a reality, but bring hundreds — thousands — of people along for the ride. That’s Jonathan’s super-power. But he’s not an accountant.

Hire-in the talent you need

Ricky had completed his articles at Grant Thornton, and Propertuity’s investment partner had reached out to their internal recruitment division. “The business was looking for a financial manager, and they thought I might suit the position,” he recalls.

Ricky didn’t want to join an established firm, where his role was rigid and clearly defined, but wanted to play a key role in a start-up instead. He wanted to help build something unique and ground-breaking. Propertuity was an ideal fit.

“Jonathan and I clicked immediately, and I could see that he was a visionary who had a big idea, and the scope and vision to see it through. We both believed that for Joburg to work, the inner city must work — the path to economic growth is through the inner city.

“But I also knew that successful businesses need both a grand vision, and a strong back-end to support that vision. And this was what Propertuity was lacking.

“When I agreed to join the business, my handover pack was ten pieces of handwritten, A4 papers. There were no books. No processes. No structures or operational management to speak of. My wish had come true: I was joining a business with a handful of successful projects under its belt, but with a massive vision. It was time to get to work.”

Related: Meet The 40 Richest Self-Made Entrepreneurs On Earth

It was 2013. Jonathan had convinced an investor (Buffet Investments) to come on board and support his idea a few years earlier. He’d started with Arts on Main, because he knew that if you can get the artists to support you, the rest will follow. Every project, product or service needs early adopters, and in the urban space, that’s artists. Maboneng stretched across a few blocks. It was on the map. It was generating great PR and public interest.

But as a business, Propertuity was at a crossroads. It could remain a ‘one man band’, or become a full-fledged business able to achieve Jonathan’s vision.

More than R1 billion has since been invested in Maboneng, with a further R1 billion earmarked for the urban renewal of a six-block land parcel recently purchased by the business. Propertuity has launched Rivertown, an urban renewal project in Durban, and a bespoke JV in Hyde Park. It also has plans to launch in Cape Town once a suitable project is found; the team is currently reviewing a number of potential deals.

Rand Merchant Holdings has invested in the business (its second ever property investment), and in June this year, Jonathan launched DiverCity, a R2 billion property fund in partnership with Tallis and Atterbury.

On high-impact growth: 5 lessons

Propertuity

In 2013, Jonathan was at a crossroads. He chose to avoid the founder’s trap, lay strong foundations, build an incredible team and take Propertuity to new heights. This is how he did it.

1Know who you are

“Theoretically, I’ve been aware of the founder’s trap since I became an entrepreneur,” says Jonathan, who was 24 years old when he registered Propertuity ten years ago.

“I owned laundromats before I launched Propertuity, so I’ve been a business owner all my adult life. An awareness of what I don’t know has driven me to learn as much as I can — from biographies, business books, magazines and other entrepreneurs — anything I can get my hands on and learn from. I’ve exposed myself to business theory, and used it to figure out my entrepreneurial path.”

A critical element of Jonathan’s business journey has been to determine who he is as an entrepreneur. “We all have multiple influencers who shape who we are and how we understand our roles in business. The first successful person I was exposed to was my dad. He’s a perfectionist and micro-manager who ran his own law firm. It was cash generative and successful, but unscalable because of his management style.

Learn from different leadership styles to find what works for you

“My second exposure to business leadership was through my first mentor and founding investment partner. He’s a delegator. Through my exposure to two completely different leadership styles and personalities, I started to understand where I was on the spectrum, and that you need to lead from a point of example and energy.

“I’m comfortable in a leadership position because I’m happy to delegate and I don’t micro-manage. I’m inspired by Jack Welch and Mark Zuckerberg. I want to grow and lead teams. This realisation helped me to shape the organisation we have today. We’ve achieved scale and success because of the people we’ve brought in, such as Ricky. He joined us as financial manager and is now MD because he’s grown with the business and been instrumental in putting proper operational controls in place.

“That’s not where my strengths lie. I’m the innovator and strategist. Elon Musk has been a huge inspiration to me in this regard. You need to know yourself, and most importantly, you need to be able to hand the operations of the business over to concentrate on your core areas. Where do I provide the most value? What do I do that pushes the needle? And where should I not get involved? Where could I actually do more harm than good? I’m not good at the small details. But I have been able to step back and let people who are take ownership and run with it.”

Related: How Mark Sham Earned His Suits & Sneakers

2Strategies need to evolve

propertuitys-canteen

In the beginning, Propertuity’s mission was simple: How can we contribute positively to the city? The first four years of the business were focused on catalytic growth, getting early wins and breaking the mould to gain a foothold in the sector and neighbourhood.

The lynchpin of the strategy was Arts on Main — bring in the artists, and use culture-led regeneration to gain traction. “We learnt so much in the early years. Our original focus was on retail, but we realised that to build communities, we needed to start with the residential component. For a community to work, you need people living there, working there and being able to shop there.

“This has become our north star: Community numbers. How do you get a community to a size big enough to sustain itself?

Believe in your business enough to use it personally

“I’ve lived in eight different apartments in Maboneng. I don’t know another entrepreneur who literally lives in their product. But it’s allowed me to understand what we’re doing from the ground up, which has shaped how we’ve grown and developed the business and our focus.

“In particular, we’re a development business. Our first model purchased buildings and reconditioned them, maintaining the original structure as much as possible. Because many inner-city buildings are only a few stories, we’ve had to build up in some cases, but the idea was regeneration, not knocking down and starting from scratch. We’ve wanted to preserve beautiful architecture in the inner-city as much as possible. Going forward, and to meet market needs, most of our future pipeline is new builds.

“Ultimately, to continue developing the area, we need cash moving through the business. Our model is to buy, develop and sell but we hold onto the management of the buildings. Cash from sales is reinvested into new developments and projects.”

Upgrade your strategies as your business grows

As a company achieves its goals, strategies need to shift. What worked in the early days of Maboneng has developed into a model that can be replicated, enabling Propertuity to achieve sustainability and scale.

“Our next phase is to use the principles we’ve learnt and expand into other markets. We opened a Durban head office in 2014 and have started regenerating an old industrial area near the ICC and beachfront called Rivertown. I’m from Durban, and even though we’re replicating our model, we know that it’s not plug and play. Durban has a different economic cycle to Joburg and Rivertown is about combining beach and city life.

“If you don’t pay attention to your market, you won’t deliver the right product. That’s been a big lesson for us, and one of the drivers behind adjusting our strategy where necessary — communities will buy into your vision, but you also need to allow them to lead. If we tried to exert too much control, we wouldn’t have achieved so much in such a short space of time.”

Develop your business model to accommodate your business’ growth

As Jonathan has grown as an entrepreneur, and as his business has developed, his business model has had to follow suit. He started out small: A catalyst to bring people in, keep them here, then lay roots and a foundation, and finally, help shape a vibrant, self-sustaining community.

“It was my fascination with Elon Musk and his Master Plan — and Master Plan Part Deux — that helped me pull the various threads together of what we were trying to do, and concretise them into the need for our new volume-based product that we can roll out and scale to achieve real urban renewal.”

Elon’s Musk’s Master Plan

In a nutshell, here are Elon’s Musk’s Master Plan, and Master Plan Part Deux (published ten years later as the first Master Plan was coming to fruition):

  1. Create a low volume car, which would necessarily be expensive
  2. Use that money to develop a medium volume car at a lower price
  3. Use that money to create an affordable, high volume car
  4. Provide solar power. No kidding, this has literally been on our website for ten years.

In short, Master Plan, Part Deux is:

  1. Create stunning solar roofs with seamlessly integrated battery storage
  2. Expand the electric vehicle product line to address all major segments
  3. Develop a self-driving capability that is 10X safer than manual via massive fleet learning
  4. Enable your car to make money for you when you aren’t using it.

Lay the foundations for a much grander vision

The reason behind the first Master Plan was to help consumers see that Tesla wasn’t meant to be a new, expensive sports car because there was a shortage in the market. It was a very specific way to lay the foundations for a much grander vision.

Tesla’s scale is larger than Propertuity’s, but the foundations are the same: Build something that matters, and use each step of the strategy to bring you closer to an ultimate, enormous, audacious goal.

As of 2016, Tesla and Ford were the only American motor companies that hadn’t gone bankrupt post the recession, so it’s safe to say Musk is doing something right.

Related: The 50 Richest People In The World

3Strong teams build incredible businesses

propertuity-building

Integral to Propertuity’s overall strategy has been to put strong teams in place, starting with the appointment of Ricky Luntz as financial manager in 2013. Over the past four years, Ricky’s role has grown and today he is MD. Alongside this growth has been the development of an exco, including a director of asset management, a CFO and an HR strategist.

“We hired an HR strategist five years ago as part of our second phase of development. HR is a huge focus for us because we know that great businesses are only built with the right people in place,” says Jonathan.

The key is finding people who want to be involved in entrepreneurial businesses, because the rewards can be great, but it takes hard work and dedication.

“I came in as a financial manager, but what I actually did was my role, plus data capturer, bookkeeper and financial director,” says Ricky. “Most early start-up positions look like this. It looks flashy and fun from the outside, but the reality is that it’s the hardest work you’ll ever sign up for. You need to be willing to
roll up your sleeves and help out wherever you’re needed.”

This takes a strong focus on staff appreciation and incentives. Ricky worked 20 months straight without a break, and he wasn’t the exception to the rule. “There are no segmented approaches in start-ups. You can be the operational director and the plumber, and you need to always be willing to put in 15 out of 10.”

Find the right people to better your business

Finding the right candidates, who are willing to pour passion and hard work into your business, isn’t always easy. When you find the right individuals, you need to keep them.

“I’ve always believed in sharing risks with rewards,” says Jonathan. “It’s one of the ways that our philosophies align with RMH. They believe that there should always be an alignment between exco and the rest of the management structure to ensure continuity in a business. They encourage wider participation. It promotes scalability as well because people perform better when they have ownership over something.”

This was one of the reasons why Ricky was promoted to MD in 2016, when the RMH deal closed, and why he received shares in the business as part of the deal.

Implement your own incentive strategies

Across the organisation, Jonathan has always implemented shareholder-aligned bonus schemes, as well as creative incentives for all staff members based on outcomes and outputs that are more creative than a thirteenth cheque.

Over the past four years. Propertuity has grown from seven employees to over 120. “One of the first things we did was open a Durban office so that we could have a dedicated team with a strong GM on the ground. If you don’t trust your people,
you’ll never reach true scale. They make
it possible.”

Having a dedicated GM in Durban has played an integral role in helping the business to scale geographically.

Related: 27 Of The Richest People In South Africa

4Make marketing work for you

Urban renewal projects will naturally garner attention. On the one hand, this means marketing is happening for you, without even lifting a finger. On the other, there are certain responsibilities the business needs to take on to ensure a consistent message is heard and understood. The first is putting your golden thread in place.

“We’ve focused on ensuring that the precinct is easy to navigate. We pay a lot of attention to detail, and we’ve developed certain urbanism and design principles that we implement in everything we do. Propertuity buildings and areas are easy to pinpoint as a result,” explains Jonathan.

“This ties in with our understanding that successful precincts and neighbourhoods must be accessible and desirable. That’s the secret sauce. No marketing in the world will be successful without those core ingredients. Businesses don’t operate in isolation — your product or service must have a symbiotic relationship with your customers.”

This understanding of how to market property as an idea, and not just a building or collection of buildings, has led to Propertuity’s current JV with Narrative. “The Hyde Park venture is new for us — it’s bespoke and high end, which hasn’t been our mandate in Maboneng, but the principles are the same. We’re the design and marketing guys. This has become our niche, based on our experiences building a precinct and community from the ground up.”

5Focus, focus, focus

When you’re an innovator, you’re bound to make mistakes. You’re travelling new paths, trying different things and learning a multitude of lessons along the way. This may mean you have to pivot as well. But that doesn’t mean you should lose focus.

“We haven’t always been right first time round,” says Jonathan. “Some mistakes are more expensive than others, but we always learn from them and make sure we don’t lose focus when something derails us.”

A recent example is 8 Morrison, a building in Durban’s urban renewal project that started out as a retail centre. “Within a year we realised it was too soon for retail to succeed there. We converted the building into an office space. We were wrong, and we had to take the hit and move forward.

“When that happens, it’s essential not to lose focus. That’s been my biggest shift this year. I’ve evolved as an entrepreneur and founder. I’ve built an incredible team, and I leave them to do what they do best. This has opened up my time to focus on what I do best: Innovation and strategy. I have a list of 13 key things that I’m focusing on this year. Every day I look at that list and remind myself that these are the most important things for 2017. Everything, unless it’s an urgent operational issue, must link back to one of the 13 things on my list, or I don’t do it. That’s how you push the needle.”

Nadine Todd is the Managing Editor of Entrepreneur Magazine, the How-To guide for growing businesses. Find her on Google+.

Entrepreneur Profiles

Expert Advice From Property Point On Taking Your Start-Up To The Next Level

Through Property Point, Shawn Theunissen and Desigan Chetty have worked with more than 170 businesses to help them scale. Here’s what your start-up should be focusing on, based on what they’ve learnt.

Nadine Todd

Published

on

shawn-theunissen-and-desigan-chetty

Vital Stats

  • Players: Shawn Theunissen and Desigan Chetty
  • Company: Property Point
  • What they do: Property Point is an enterprise development initiative created by Growthpoint Properties, and is dedicated to unlocking opportunities for SMEs operating in South Africa’s property sector.
  • Launched: 2008
  • Visit: propertypoint.org.za

Through Property Point, Shawn Theunissen and his team have spent ten years learning what makes entrepreneurs tick and what small business owners need to implement to become medium and large business owners. In that time, over 170 businesses have moved through the programme.

While Property Point is an enterprise development (ED) initiative, the lessons are universal. If you want to take your start-up to the next level, this is a good place to start.

Risk, reputation and relationships

“We believe that everything in business comes down to the 3Rs: Risk, Reputation and Relationships. If you understand these three factors and how they influence your business and its growth, your chances of success will increase exponentially,” says Shawn Theunissen, Executive Corporate Social Responsibility at Growthpoint Properties and founder of Property Point.

So, how do the 3Rs work, and what should business owners be doing based on them?

Risk: We can all agree that there will always be risks in business. It’s how you approach and mitigate those risks that counts, which means you first need to recognise and accept them.

“We always straddle the line between hardcore business fundamentals and the relational elements and people components of doing business,” says Shawn. “For example, one of the risks that everyone faces in South Africa is that we all make decisions based on unconscious biases. As a business owner, we need to recognise how this affects potential customers, employees, stakeholders and even ourselves as entrepreneurs.”

Reputation: Because Property Point is an ED initiative, its 170 alumni are black business owners, and so this is an area of bias that they focus on, but the rule holds true for all biases. “In the context of South Africa, small black businesses are seen as higher risk. To overcome this, black-owned businesses should focus on the reputational component of their companies. What’s the track record of the business?”

A business owner who approaches deals in this way can focus on building the value proposition of the business, outlining the capacity and capabilities of the business and its core team to deliver how the business is run, and specific service offerings.

“From a business development perspective, if you can provide a good track record, it diminishes the customer’s unconscious bias,” says Shawn. “Now the entrepreneur isn’t just being judged through one lens, but rather based on what they have done and delivered.”

Related: Property Point Creates R1bn In Procurement Opportunities For Small Businesses

Relationship: “We believe that fundamentally people do business with people,” says Shawn. “There needs to be culture match and fluency in terms of relations to make the job easier. As a general rule, the ease of doing business increases if there is a culture match.”

This relates to understanding what your client needs, how they want to do business, their user experience and customer experience. “We like to call it sharpening the pencil,” says Desigan Chetty, Property Point’s Head of Operations.

“In terms of value proposition, does your service offering focus on solving the client’s needs? Is there a culture match between you and your client? And if you realise there isn’t, can you walk away, or do you continue to focus time and energy on the wrong type of service offering to the wrong client? This isn’t learnt over- night. It takes time and small but constant adjustments to the direction you’re taking.”

In fact, Desigan advises walking away from the wrong business so that you can focus on your core competencies. “If you reach a space where you work well with a client and you’ve stuck to your core competencies, business is just going to be easier. It becomes easier for you to deliver. Sometimes entrepreneurs stretch themselves to try to provide a service to a client that’s not serving either of their needs. This strategy will never lead to growth — at least not sustainable growth.”

Instead, Desigan recommends choosing an entry point through a specific offering based on an explicit need. “Too often we see entrepreneurs whose offerings are so broad that they don’t focus,” he says. “Instead, understand what your client’s need is and address that need, even if it means that it’s only one out of your five offerings. Your likelihood of success if you go where the need is, is much higher.

“Once you get in, prove yourself through service delivery. It’s a lot easier to on-sell and cross sell once you have a foot in the door. You’re now building a relationship, learning the internal culture, how things work, what processes are followed and so on — the client’s landscape is easier to navigate. The challenge is to get in. Once you’re in, you can entrench yourself.”

Desigan and Shawn agree that this is one of the reasons why suppliers to large corporates become so entrenched. “Once you’re in, you can capitalise from other needs that may have emanated from your entry point and unlock opportunities,” says Shawn.

Building a sustainable start-up

While all start-ups are different, there are challenges most entrepreneurs share and key areas they should focus on.

Shawn and Desigan share the top five areas you should focus on.

1. Align and partner with the right people

This includes your staff, stakeholders, partners, suppliers and clients. Partnerships are the best thing to take you forward. The key is to collaborate and partner with the right people based on an alignment of objectives and culture. It’s when you don’t tick all the boxes that things don’t work out.

2. Make sure you get the basics right

Never neglect business fundamentals. Do you have the processes and systems in place to scale the business?

3. Understand your value proposition

Are you on a journey with your clients? Is your value proposition aligned to the need you’re trying to solve for your clients? Are you looking ahead of the curve — what’s the problem, what are your clients saying and are you being proactive in leveraging that relationship?

Related: Want To Start A Property Business That Buys Property And Rents It Out?

4. Unpack your value chain

If you want to diversify, understand your value chain. What is it, where are the opportunities both horizontally and vertically within your client base, and what other solutions can you offer based on your areas of expertise?

8. Don’t ignore technology

Be aware of what’s happening in the tech space and where you can use it to enable your business. Tech impacts everything, even more traditional industries. Businesses that embrace technology work smarter, faster and often at a lower cost base.

Ultimately, Desigan and Shawn believe that success often just comes down to attitude. “We have one entrepreneur in our programme who applied twice,” says Shawn. “When he was rejected, he listened to the feedback we gave him and instead of thinking we were wrong, went away, made changes and came back. He was willing to learn and open himself up to different ways of approaching things. That business has grown from R300 000 per annum to R20 million since joining us.

“Too many business owners aren’t willing to evaluate and adjust how they do things. It’s those who want to learn and embrace change and growth that excel.”

Networking, collaborating and mentoring

Property Point holds regular networking sessions called Entrepreneurship To The Point. They are open to the public and have two core aims. First, to provide entrepreneurs access to top speakers and entrepreneurs, and second, to give like-minded business owners an opportunity to network and possibly even collaborate.

“We believe in the power of collaboration and networking,” says Desigan.

“Most of our alumni become mentors themselves to new entrants to the programme. They want to share what they have learnt with other entrepreneurs, but they also know that they can learn from newer and younger entrepreneurs. The business landscape is always changing. Insights can come from anywhere and everywhere.”

The To The Point sessions are designed to help business owners widen their network, whether they are Property Point entrepreneurs or not.

To find out more, visit www.ettp.co.za

Continue Reading

Entrepreneur Profiles

Bain & Company Give You The Data On How To Become 40% More Productive

Top performing organisations get more done by 10am on a Thursday than most companies achieve in a full week. They don’t have more talented employees than everyone else though — they’re working with the same people and tools as you. Michael Mankins unpacks what separates these businesses from everyone else, and how you can learn to be more like them.

Nadine Todd

Published

on

michael-mankins

Vital Stats

“Engaged employees are 45% more productive than satisfied employees. An inspired employee is 55% more productive than an engaged employee and 125% more productive than a satisfied employee.”

When Bain & Company partner, Michael Mankins evaluates businesses, he clearly distinguishes between efficiency and productivity. Efficiency is producing the same amount with less — in other words, finding and eliminating wastages. Productivity, on the other hand, is producing more with the same, which requires an increased output per unit of input and removing obstacles to productivity.

Interestingly, when businesses face challenges or tough operating conditions, the first response is always to become more efficient, instead of more productive. Restructuring and ‘rightsizing’ are the result. The problem, says Michael, is that when companies take people out, they don’t take the work out, and so the people end up coming back, along with the costs.

A better response, he says, is to identify the work that could be removed to free up time, which could then be invested in producing higher levels of output.

While businesses have become very good at tracking the productivity levels of blue-collar and manufacturing workers, tracking the productivity of knowledge workers is entirely different.

“There’s no data around white-collar productivity,” says Michael. “The problem is that the world is shifting towards knowledge work, and so, if we can’t measure productivity, output and obstacles in that space, businesses will never get the great levels of performance they’re looking for.”

Because of a complete lack of statistics in this area, when Michael and his colleague, Eric Garton, were approached by Harvard Business Review Press to write a book dealing with this issue, they had to devise a way of looking at the relative productivity of organisations comprised of white-collar workers.

The results were unexpected. “We were asked to research the difference between top performing organisations (the top quartile) compared to average organisations. I honestly thought the answers would be obvious, even if we didn’t yet have the tools to track them. I thought the best companies would have the best people. That’s 90% of the answer. Simple as that.”

As it turned out, it wasn’t that simple at all. Of the 308 organisations in the study, drawn from a global pool, the average star performer or A-player was one in seven employees. This statistic held true whether the company was in the top 25% of performers or an average performer. The difference was that the top performing businesses were 40% more productive than their counterparts — and yet their mix of talent, on average, was the same.

“There were some exceptions, but on the whole, the best in our research accomplishes as much by 10am on a Thursday as the rest do the whole week. And they continue to innovate, serve customers and execute on great ideas — all with the same percentage of A-players as other, more mediocre businesses.”

Related: (Slideshow) Top Advice From Local Entrepreneurs That Will Change Your Business In 2019

So, what were the differentiating factors?

What’s dragging your organisation down?

First, we need to understand how Michael and Eric approached their research before we can understand — and implement — their conclusions.

“We began with the notion that every company starts with the ability to produce 100 if they have a workforce that’s comprised of average talent, that’s reasonably satisfied with their job and can dedicate 100% of their time to productivity — bearing in mind that no-one can dedicate 100% of their time to productive tasks.

“The question we were focusing on was around bureaucratic procedures, complex processes and anything else that wastes time and gets in the way of people getting things done, but doesn’t lead to higher quality output or better service to customers. That’s what we call organisational drag. You start at 100 and then the organisation drags you down. The good news is that you can make up for organisational drag in three ways: First, you can make better use of everyone’s time. Second, you can manage your talent better by deploying it in smarter ways, which includes placing it in the right roles, teaming it more effectively and leading it more effectively. Third, you can unleash the discretionary energy of your workforce by engaging them more effectively.”

This trifecta — time, talent and energy — became the basis for Michael and Eric’s book, Time, Talent, Energy: Overcome Organizational Drag & Unleash Your Team’s Productive Power. “The way you manage the scarce resource of talent can make up for some, potentially even all, of what you lose to organisational drag,” says Michael.

What the research revealed: Time

time-management-productivity

“Wasted time is not an individual problem,” says Michael. “It’s an organisational problem. The symptoms include excess emails and meetings and far more reports being generated than the business needs to operate.”

These are all manifestations of an underlying pathology of organisational complexity, which is managed by senior leadership. “The best companies lose about 13% of their productive activity to organisational drag. The rest lose 25%. The most important thing is to reduce the number of unnecessary interactions that workers are having. That means meetings and ecommunications need to be relooked.”

The easiest manifestation for Michael and Eric to observe were hours committed to meetings and how much time workers spend dealing with ecommunications. What’s left-over is the time people can actually get some work done.

What they found is that the average mid-level manager works 46 hours a week. 23 hours are dedicated to meetings and another ten hours to ecommunication. That leaves 13 hours to get some work done — except that it doesn’t.

“It’s difficult to do deep work in periods of time less than 20 minutes. When we subtracted all the other distractions that happen daily, we were left with just six and a half hours each week to do work.” What’s even scarier about this statistic is the fact that meeting work and ecommunication time is increasing by 7% to 8% each year and doubles every nine years. If left unchecked, no-one will have the time to get any work done. “This is why everyone plays catch-up after hours and on weekends,” says Michael.

“One of my clients told me that his most productive meeting is at 6.30am on a Saturday, because it doesn’t involve one minute that isn’t required or one individual that doesn’t absolutely need to be there. If the same meeting was held at 2pm on a Tuesday, there’d be twice as many people, it would be twice as long and there’d probably be biscuits.”

The point is clear: We don’t treat time as the precious resource that it is, and if we did, we would radically shift our behaviour.

Start by asking what work needs to be done and then figure out the best structure to do that work. “Don’t confuse having a lean structure that does the wrong work with being effective,” says Michael. “One of the biggest problems we see is that companies are not particularly good at stopping things. Things get added incrementally, but nothing ever gets taken away. For example, we found that 62% of the reports generated by one of our clients had a producer — but no consumer. Time, attention and energy was invested in reports that no one needed and no one read.

“Ask yourself: How many initiatives have you shut down? If you made the decision that you could only do ten initiatives effectively, and each time you added an initiative, one had to be eliminated, what would your organisation look like?

“Unless you routinely clean your house, it gets cluttered. The same is true of companies. Initiatives spawn meetings, ecommunications and reports, which all lead to organisational drag.”

What the research revealed: Talent

According to Michael, the biggest element in their research that explained the 40% differential in productivity is the way that top performing organisations manage talent.

“We conducted research in 2017 that revealed the productivity difference between the best workers and average employees. Everyone knows that A-level talent can make a big difference to an organisation’s performance, but not everyone knows just how big that difference is.”

To put it in context, the top developer at Apple writes nine times more usable code than the average software developer in Silicon Valley. The best blackjack dealer at Caesars Palace in Las Vegas keeps his table playing at least five times as long as the average dealer on the Strip. The best sales associate at Nordstrom sells at least eight times as much as the average sales associate walking the floor at other department stores. The best transplant surgeon at Cleveland Clinic has a patient survival rate at least six times longer than that of the average transplant surgeon. And the best fish butcher at Le Bernadin restaurant in New York can portion as much fish in an hour as the average prep cook can manage in three hours.

It doesn’t matter what industry you investigate, A-level talent is exponentially more productive than everyone else.

This is why Michael thought that the obvious answer to why some organisations perform better than others is the mix of talented employees they’ve attracted.

“When we asked senior leaders to estimate the percentage of their workforce that they would classify as top performers or A-level talent, the average response was slightly less than 15%. And that’s despite the fact that most companies have spent vast sums of money in the so-called war for talent.”

The big difference, as Michael and Eric discovered, is how that talent is deployed. “It’s what they do with that one in seven employees that makes the biggest difference,” says Michael. “Most companies use a model called unintentional egalitarianism, which basically means that they spread star talent across all roles. The best on the other hand, are more likely to deploy intentional non-egalitarianism. They ensure that business-critical roles are held by A-level talent.”

The challenge is that approximately 5% of the roles in most companies explain 95% of a company’s ability to execute its strategy, and very few organisations articulate which roles those are — but the ones that do tend to be top performers.

“There’s an excellent historical example of this at work,” says Michael. “Between 1988 and 1994, Gap was a high-flyer in the retail sector. They performed globally on all levels — they grew faster than anyone else, were more profitable, had higher shareholder returns, and were the most admired company.

“During that time period, the organisation was led by Mickey Drexler, and his strategy was to focus on what he believed was Gap’s critical role, which was merchandising. He wanted every merchandiser to be a star. ‘No one will tell us what the colour is this year — we’re going to tell the world. We’re going to determine which styles are in and what everyone will be wearing.’

“And they did. If you want proof that Gap’s merchandisers were in fact stars during that period, you can look at today’s CEOs and COOs of the world’s largest retailers. Most of them were merchandisers at Gap during those years.”

The challenge of course is that everyone is always trying to hire stars, and yet only 15% of employees can be described as A-level talent. What can organisations do to utilise their stars wisely?

“First, move a star into a different position if they’re not in a business-critical role. To achieve this, how you define a star might have to change. Some companies hire for positions, and others hire for skills across positions. Stars, in my view, are more the latter. They can learn different skills and fill different roles.

“Second, start defining your business-critical roles. If you ask executives what percentage of their roles are business critical, most say 54%. They’re not discerning. It’s unintentional, because they don’t want to signal to their workers who aren’t in a business-critical role that they’re not as valuable to the organisation, but the reality is that people figure it out anyway, and you just end up with business-critical roles that aren’t filled by the right people, and stars in positions that anyone else could fill.”

Related: Entrepreneur Erik Kruger On The Importance Of Clarity And Embracing Failure

Teams perform better than individuals

To understand how important teams are when deploying talent, Michael uses an example from the world of racing — Nascar in the US to be precise.

“Between 2008 and 2011, there was one pit crew that outperformed everyone else on the track,” he says. “A standard pit stop is 77 manoeuvres, and this crew could complete them in 12,12 seconds, which was faster than any other team. However, if you took one team member out and substituted them with an average team member, that time jumped to 23 seconds. Substitute a second team member, and it was now 45 seconds. The lesson is simple: As the percentage of star players on a team goes up, the productivity of that team goes up — and it’s not linear.”

Michael and Eric also discovered that the role leadership plays on team productivity is both measurable and exponential.

“In 2011, the National Bureau of Economic Research wanted to quantify the impact of a great boss on team productivity. They found that a great boss can increase the productivity of an average team by 11%, which is the same as adding another member to a nine-member team.

“If you take that same boss and put them in charge of an all-star team, productivity is increased by 18%, and this is with a team whose productivity was exponentially higher to begin with. Great bosses act as a force multiplier on the force multiplier of all-star teams.”

According to Michael and Eric’s research however, what most organisations tend to do is place a great boss with an under-performing team in the hopes of improving them, when what they should be doing is pairing great bosses with great teams.

“We did a survey that asked a simple question: When your company has a mission-critical initiative, how do you assemble the team? A: Based on whomever is available. B: Based on perceived subject matter expertise. C: We attempt to create balanced teams of A, B and C players to foster the development of the team. D: We create all-star teams and we put our best leaders in charge of them.

“We thought everyone would answer D. We were wrong. 30% of our bottom three quartiles answered B, closely followed by C, and then A. Only 8% of them answered D.

“The results were very different in our top-performing quartile though. There, 81% of respondents answered D. In other words, the 25% most productive companies in our study set were ten times more likely to assemble all-star teams with their best players than the remaining 75% of the organisations in our research.”

How talent is deployed makes a difference. “I recently had this highlighted for me through another sporting analogy. The world record for the 400-metre relay is faster than the 100-metre dash multiplied four times. How is that possible? When your role is clear and your position is clear, the handoff is seamless. Under these conditions, the best teams outperform a collection of the best individuals.” Michael does offer a word of advice though.

“Don’t fall into the trap of believing that if you do have the best talent, you don’t need to worry about anything else. I don’t believe that’s true. There are always higher levels of performance that can be achieved because there are always areas you can improve on.”

What the research reveals: Energy

According to Michael, employee engagement and inspiration is a hierarchy. “There are a set of qualifiers that have to be met just to feel satisfied in your job: You need to feel safe, have the resources you need, feel that you’re relatively unencumbered in getting your job done every day and that you’re rewarded fairly.

“To be engaged, these all need to meet, and more. Now you also need to feel part of a team, that you’re learning on the job, that you’re having an impact and that you have a level of autonomy.”

Inspiration takes this a step further. “Inspired employees either have a personal mission that is so aligned with the company’s mission that they’re inspired to come to work every day, or the leadership of their immediate supervisors is incredibly inspiring, or both.”

Why does this matter? Because how satisfied, engaged or inspired your employees are has a real, tangible impact on productivity. “Engaged employees are 45% more productive than satisfied employees. An inspired employee is 55% more productive than an engaged employee and 125% more productive than a satisfied employee.”

The really scary statistic is that 66% of all employees are only satisfied or even dissatisfied with their jobs, 21% are engaged, and only 13% are inspired. “These statistics are pretty constant, although top organisations can improve their engaged and inspired ratios,” says Michael. “What we found amongst those companies that did have more engaged and inspired workers was that they all tended to believe that inspiration can be taught. It’s not innate. You can become an inspirational leader with the right attitude and training.

“For example, one organisation surveys its employees every six months and specifically asks workers to rate how inspirational their leaders are. If you’re rated uninspiring by your team for the first time, you’re given training. If, six months later, you’re still rated uninspiring, you’re given access to a coach to evaluate why the tools aren’t working for you.

“By the third, two questions are asked: Should you be a leader, and should you be at the company? Many productive employees can be effective individual contributors but aren’t necessarily leaders, or aren’t happy as leaders, and would best serve the organisation in a different role. The second question is tougher, but even more important. If an inspired employee is 55% more productive than an engaged employee and 125% more than a satisfied employee, an uninspiring leader is a tax on the performance of the company, and there has to be a consequence to that. We have to constantly enrich our workforce and leaders need to be included in that.”

The problem is that very few organisations are asking how inspiring their leaders are. “If you don’t know if your employees are engaged or if your leadership is inspiring, you can’t address it,” he says. “You can take a satisfied employee and make them engaged, but you can’t inspire someone if they aren’t first engaged — that’s the hierarchy. Employee engagement is largely achieved through the way you manage teams. You have to give people the sense that they are having an impact, working within a team and learning. Get that right, and you’ll unlock a powerful level of discretionary energy that will drive productivity in your organisation.”

Related: How Yoco Successfully Secured Capital And The Importance Of A Pitch

Time, Talent, Energy: Overcome Organizational Drag and Unleash Your Team’s Productive Power, by Michael Mankins and Eric Garton, focuses on the scarcest resource companies possess — talent — and how it can be utilised to drive productivity.

Visit www.timetalentenergy.com to find out more.

Continue Reading

Entrepreneur Profiles

7 Foundational Values Of Brand Cartel And How They Grew an Iconic Business From The Ground Up

Marco Ferreira, Renate Albrecht and Dillon Warren built Brand Cartel, a through-the-line agency, that delivers exactly what they wanted — and has grown exponentially as a result.

Nadine Todd

Published

on

brand-cartel

Vital Stats

  • Players: Marco Ferreira, Renate Albrecht and Dillon Warren
  • Company: Brand Cartel
  • Launched: 2013
  • Visit: brandcartel.co.za

“We’d never worked at agencies, which meant we had no idea how much you need to run an agency. We grew into it. It’s made us really good at what we do.”

When Dillon Warren, Renate Albrecht and Marco Ferreira launched Brand Cartel in 2013 they were in their early 20s with zero agency experience between them. The idea had started when Marco recognised that social media was taking off, but no agencies were playing in that space yet. It was a clear opportunity.

Printing flyers that said ‘Your social media is so last season’, Marco and Renate went from store to store in Sandton City, pitching their services. When Dillon joined them a few months later because they needed someone to handle the company’s finances, they had two laptops between them, R6 000, which Dillon had earned from a Ricoffy advert, and sheer will and tenacity.

“We shared a house to save on rent and split everything three ways,” says Renate. “At one point we hadn’t eaten in two days. My mom lent me R500 so I could buy Futurelife and a bag of apples for the three of us.”

The trio hired their first employee soon after launching Brand Cartel, and after prioritising salaries and bills, there wasn’t much leftover. “Dillon actually paid us R67 each one month,” laughs Marco. “That’s what was left — although I still can’t believe he actually sent it to us.” It was at this point that the young business owners realised they needed credit cards if they were going to make it through their start-up phase — not an easy feat when your bank balance is under R100.

Related: What Comfort Zones? Get Comfortable With Being Uncomfortable Says Co-Founder Of Curlec: Zac Liew

“Looking back, those days really taught us the value of money,” says Dillon

We spent a lot of time with very little, and we’re still careful with money today.” Through it all though, the partners kept their focus on building their business. “It almost didn’t work for a long time. We were young and naïve, but in a way, that was our strength. We didn’t have any responsibilities, and we’d never worked at agencies, which meant we had no idea how much you need to run an agency. We grew into it. It’s made us really good at what we do. All of our business has been referral business. It takes time, but we focused on being the best we could be and giving everything we had to our clients. Our differentiator was that we really cared, and were willing to offer any solutions as long as they aligned with our values.”

This is how Brand Cartel has grown from a social media agency into PR and Media Buying, SEO and PPC Strategy, Digital and Print Design, Web Development, Campaign Strategy and now an Influencer division. “It’s an incredibly competitive space with low barriers to entry, which meant it was easy to launch, but tougher to build a client base,” says Renate. “I’d sometimes cry in my car between sales pitches, and then walk in smiling. We had no idea if we’d make it.”

The perseverance has paid off though. Strong foundations have laid the groundwork for exponential growth over the past year, with turnover growing almost ten-fold in 2017 thanks to relationship-building, strong referrals and fostering an internal culture and set of values that has driven the business to new heights as a team.

Like many start-ups, Renate, Dillon and Marco have made their fair share of hiring mistakes, but as the business grew and matured, the young entrepreneurs began to realise that the success of their business lay in the quality of their team and the values they stood for.

This meant two things: Those values needed to be formalised so that they could permeate everything Brand Cartel does, and they needed a team that lived, breathed and believed in them.

“We’ve had some nasty experiences,” admits Dillon. “You should always hire slowly and fire fast, and for five years we did the opposite. We’ve hired incredible people, but we’ve also ended up with individuals who didn’t align with our values at all, and that can destroy your culture.

Dillon, Marco and Renate realised they needed to put their values on paper. “We did an exercise and actually plotted people based on a score grading them against our values, so we knew where our issues were. We knew what we wanted to stand for, and who was aligned with those values. We were right; within a few weeks resignations came in and we mutually parted ways.”

The team that stayed was different. They embraced Brand Cartel’s values, and more importantly, it gave the partners a hiring blueprint going forward.

“Values are intangibles that you somehow need to make real, so it’s important to think about the language you use, and how they can be used in a real-world work context,” says Marco.

The team has done this in a number of ways. First, they chose ‘value phrases’ that can be used in conversation, for example, ‘check it, don’t wreck it’, and ‘are you wagging your tail?’ Team members can gently remind each other of the value system and focus everyone on a task at hand simply by referring to the company’s values. “In addition, when someone is not behaving according to those values, you can call them out on the value, which is an external thing, rather than calling them out personally,” explains Dillon.

Related: How Matthew Piper And Karidas Tshintsholo Launched Their First Business From Their UCT Dorm Rooms

Second, all performance reviews are based on the values first. This means everyone in the organisation begins any interaction from a place of trust, knowing they are operating according to the same value system.

“When you’re in a production environment with jobs moving through a pipeline, there can be problems and delays,” explains Marco. “Instead of pointing fingers when something is over deadline or a mistake is made, our team can give each other the benefit of the doubt and work together. They trust each other, which creates cohesion. We all work as a team, which impacts the quality of our work and the service we offer our clients.”

The system is simple. Coaches will step in first if there is an issue before it escalates to the Head of Team Experience, Nicole Lambrou. If Nicole is called in, she will address the problem head on. “Inevitably it’s something fixable,” says Marco. “By addressing it immediately and in the context of our values it can be sorted out quickly. Ultimately, the overall quality of our team improves, and we are a more cohesive unit.”

The founders have seen this in action. “I recently arrived at a client event and three different people came up to me and complimented my team on the same things — all of which aligned with our values. Everyone at Brand Cartel lives them, internally and externally,” says Renate.

The value system has also shaped how the team hires new employees. “We used to meet people and hire for the position if they could do the job,” says Renate. “But then we started realising that anyone can hold up for an hour or two in an interview. You only learn who they really are three months and one day later.

“We need people who walk the talk, and we really only had a proper measurement of that once we articulated our values. Our interview style has changed, but so has what we look for.”

brand-cartel-south-african-agency

Here are the seven values that Dillon, Marco and Renate developed based on what they want their business to look like, how they want it to operate, and what they want to achieve, both internally, and in the market place.

1. Play with your work

Our goal is for everyone on our team to become so good at what they do that it’s no longer work. Once that happens you love your job because you’re killing it. It’s why sportsmen are called players, not workers, and it starts with the right mindset.

2. Wag your tail

The idea behind this value stems from Dale Carnegie, who said ‘have you ever met a Labrador you don’t like?’ In other words, we all respond well to people who are friendly. It needs to be genuine though, so again, it’s a mindset that you need to embrace.

We live these values whether we’re at the office or meeting clients. If you go into each and every situation with joy and excitement, from meeting someone new to a new brief coming in, you’ll be motivated and excited — and so will everyone around you.

3. Check it, don’t wreck it

The little things can make big differences. Previously it was too easy to pass the buck, which meant mistakes could — and did — happen. Once you instil a sense of ownership and create a space where people are comfortable admitting to a mistake however, two things happen. First, things get checked and caught before there’s a problem. Second, people will own up if something goes wrong. This can help avoid disasters, but it also leads to learnings, and the same thing not happening again.

4. What’s Plan B (aka make it happen)

We don’t want to hear about the problem; come to us with solutions, or better yet, already have solved the problem and made it happen. We reached a point where we had too many people coming to us with every small problem they encountered, or telling us that something wasn’t working so they just didn’t do it.

That wasn’t the way we operated, and it definitely wasn’t the way we wanted our company to operate. We also didn’t want to be spoon feeding our team. It’s normal for things to go wrong and problems to creep in — success lies in how those problems are handled.

Ignoring problems doesn’t make them go away, so we embrace them instead, encouraging everyone on our team to continuously look for solutions. For example, the PR department holds a ‘keep the paw-paw at Fruit & Veg City’ meeting every morning, where we deliberately look for where problems might arise so that we can handle them before they do. We start with what’s going wrong and then move to what’s going right. You need to give your team a safe and transparent space to air problems though. We don’t escalate. We need to know issues so that we can collectively fix them, not to find fault.

Related: The 5-Hour Rule Used By Bill Gates, Jack Ma And Elon Musk

5. Put your name to it

It’s about pride in work and making it your own. When someone has pride in what they’re doing, they’ll not only put in extra time and effort, but they’ll pull out all the stops to make their creative pop, or go the extra mile for a client.

We need to find the balance between great quality work and fast output though. One way we’ve achieved this is by everyone reviewing the client brief and then committing to how long their portion will take.

When someone gives an upfront commitment, they immediately take ownership of the job. It took time for us to find our groove with this, but today we can really see the difference. Our creative coaches also keep a close eye on time sheets and where everyone is in relation to the job as a whole to keep the entire brief on track. If someone is heading towards overtime we can immediately ask if something is wrong and if they need assistance.

We also celebrate everything that leaves our studio. Every morning we have a mandatory 15-minute catch up session where we check in on four core things: How am I feeling (which allows us to pick up on the mood in the room and the pressure levels of our teams); What’s the most important thing I did yesterday; What’s the most important thing I’m going to do today (both of which give intention and accountability); and ‘stucks’, issues that team members need help with. We then end off with our achievements so that we can celebrate them together.

6. Keep it real (aka check your ego at the door)

We believe in transparency. At the end of the day we’re all people trying to achieve the same thing, but it’s easy for ego to creep in — especially when things go wrong. You can’t be ego-driven and solutions-orientated. If clients or team members are having a bad day, you need to be able to focus on the solution. Take ego away and you can do just that. It’s how we deal with stucks as well. We can call each other out and say, ‘I’m waiting for you and can’t do my job until I receive what you owe me,’ and instead of getting a negative, ego-driven reaction, a colleague will say, ‘sorry, I’m on it.’

7. Walk the talk

For us, ‘walk the talk’ really pulls all our other values together. It’s about being realistic and communicating with each other. If you’ve made a mistake or run into a problem, tell your client. Don’t go silent while you try and fix it. Let them know what’s happening and fill them in on your plan of action.

Walk the talk also deals with the industry you’re in. For example, if you’re a publicist, you need to dress like a publicist, talk like a publicist, and live your craft. In everything we do, we keep this top of mind.

Continue Reading
Advertisement

SPOTLIGHT

Advertisement

Recent Posts

Follow Us

Entrepreneur-Newsletters
*
We respect your privacy. 
* indicates required.
Advertisement

Trending