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From School Teacher to Mining Mogul: Tim Tebeila

His vision for a better life and his drive to help his community saw him grow his business interests slowly but surely.

Monique Verduyn

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I grew up in Sekhukhune in Limpopo, the third child in a family of seven – four boys and three girls. Our mother took care of us and we were supported by our father who was a migrant labourer in Johannesburg. We were poor and there were many hardships.

Our school was ten kilometres from where we lived, and every day we had to hike up and down rocky paths and through a river to get there. It was very difficult in winter when we had to wake up in the dark, at 4.00am, to make sure we got to class on time.

Related: 10 SA Entrepreneurs Who Built Their Businesses From Nothing

I know that my thinking as a child was different. From the age of about eight, back in 1973, I remember being concerned about taking care of the family. I was nine when I started getting temp jobs, either gardening or doing piece work at the local factories.

I would earn R20 and take it to my mother. Children usually think of buying things for themselves, but I bought curtains for the house at a jumble sale. I liked shopping at jumble sales because I saw that I could buy so much more there than at a regular shop.

I bought clothes for myself which was a big thing for us because we would otherwise only get clothes once a year at Christmas, when my father came home with clothing and a school uniform for each of us.

Poverty was a strong driving force for me and it pushed me to work harder. I became committed to ensuring that somehow I would build a better future for my family and continue to be a giving person. In high school, I continued to do part-time work to help the family with the basic necessities.

I would give some money to the local bus driver when he was on his way into town. He bought boxes of apples for me which I sold at school for a small profit. These things started to help me develop a business mind over time.

A little later I started selling Putco bus tickets. I used to buy about five weekly tickets, as well as one for myself, and go to the bus stop before sunrise to catch the commuters who were going from Kwa-Ndebele to Marabastad.

Related: Edward Moshole Founder Of Chem-Fresh Started With R68 And Turned It Into A R25 Million Business

The weekly tickets were convenient and good value for the bus passengers, as they were cheaper than the daily fare. I would find the commuters who needed only a single ticket, and would allow them to use one of the weekly tickets at the reduced price, but I would travel with them so that I could take my tickets back once they reached their destination. I would then do the same thing with commuters travelling from Marabastad to KwaNdebele.

I managed to earn about R800 a month this way.

Becoming a teacher

When I finished high school, my parents chose teaching as a career for me. It was a highly respectable profession at the time, and education was seen as a good field to go into. My parents had saved the money to pay for my tuition, but there was little left for anything else.

We had second-rate schooling, no facilities, and huge discrepancies between rural and urban education. In addition, the high fees made it almost impossible for people from my background to study. I became an activist and a student leader at college and I was committed to fighting the education system that was being imposed on us by the apartheid government.

I was fighting for equality and aiming to change the rules so that they could be more favourable to the needy. But I managed to keep focused on my studies too, and graduated with a secondary school teaching qualification.

I got my first teaching job in Tembisa in 1989, but I continued to be an activist and I helped to organise the operation of banned organisations in the schools. I paid dearly for that. At the beginning of the next school year, I discovered that the Department of Education had fired me from my position – I still remember it was post number 14.

They employed somebody else and no-one had bothered to tell me. I then discovered I had been banned in Gauteng, and in my home province of Limpopo. I remained unemployed for four months and I went into arrears on the payment for the first thing I had bought on my teacher’s salary – a bed from Price and Pride. Being unemployed led to numerous financial difficulties.

I lived on half a loaf of bread a day and a 5-litre bottle of Oros which would last me two weeks.

Luckily, there was a shortage of teachers in Mpumalanga at the time and I managed to get a job in KwaNdebele. But the salary was low; I was making R16 000 a year, and I needed to earn more money just to survive. I started selling insurance part-time almost immediately.

Related: Slikour’s Moto: If You Dream It, You Can Be It

I was selling to teachers who knew and trusted me and I did very well. Within a few months I became the top part-time rep in my region and I was earning 12 times my teaching salary every month.

The move to insurance

In 1992 I decided that enough was enough and I went into insurance full-time. I worked for Sanlam and soon became one of their top reps in Mpumalanga. A year later I moved back to Polokwane because I wanted to be closer to my family, but I continued to work for Sanlam until 1995.

Related: Self-Made Millionaire At 24 Marnus Broodryk On How To Build A R1 Billion Business

In my time there I learnt that when you sell, you’re selling yourself first, and then the product. People are buying you, which is why it is so important to build good relationships and have strong networks.

In 1995, I took the leap and decided to open my own brokerage. By then, the ANC Government had been in place for a year. New opportunities became available to black people for the first time.

It was a good time to take advantage of this business opportunity as Government was employing public servants across various departments and new public service organisations that had been established. This gave me access to a whole new market.

I also wanted to start my own business because when you are employed by a company, you can only sell their products – I wanted the freedom to sell other insurance products and I also wanted to be independent. I had done really well and I didn’t see the need to report to anyone else anymore.

My own business strategy was to target pensioners and the uninsured low end of the market who were not being serviced by the big companies. I financed the launch of a brokerage firm – Morethi Insurance Brokers – with the commission I had been making.

For that type of business, all you need is a desk, a laptop, four walls and a PA. I basically continued to do what I had been doing, just for myself. But there are major challenges involved in shifting from one gear to the next – I went from the security and recognition that comes with a big insurance company to a small independent brokerage.

That kind of move can really mess you up emotionally and financially. Cash flow needs required me to recapitalise the business from time to time, which was stressful. I was alone and I suffered for the first few months as I built my client base, but I was determined not to borrow money.

Related: Persistence Can Beat Any Odds Says The Founder Of Rebosis Property Fund

As a result, some of my credit accounts were compromised. Everything I was paying on instalments, like my house and car, was in arrears. The sheriff was threatening to attach all my possessions. But I knew that if I borrowed money from the loan sharks, I would then be threatened from both sides, so I paid what little I could when I could, and starved and suffered my way through.

The determination not to borrow money became a fundamental part of my business philosophy. I said to myself, “I’m down now, but I’ll push to bring in the business and then I’ll be up again.”

And that’s what I did. Because insurance is about relationships, I would wake up at 3.00am, go to my office, and prepare breakfast for my clients with bread I had bought the night before. I packed the sandwiches in my car and spent the mornings on the road selling.

Related: We Chat to Self-Made Millionaire Lebo Gunguluza

I knew this would work as a value add because when people do not have a lot of money, they are hungry and food is received like a gift. By midday I would be back at my desk doing admin. At the end of the day I went straight home and I would go to sleep early because I had to be up again before dawn.

I travelled vast distances between Limpopo and Mpumalanga, Gauteng and the hinterlands of KwaZulu Natal. Challenging as it was, my efforts paid off. Within six months the business was doing well and I had proved my ability to sell once again by acquiring many new clients.

At this point, my vision began to unfold and I started believing that something really great was going to happen. I had been learning every step of the way and my hard work was starting to pay off. It was then that I knew I wanted to create a meaningful and sustainable business that would enable me to help lots of people in my community.

Building on opportunities

In 1996 I took advantage of Government’s drive to empower previously disadvantaged people and I established a company called Tebeila Building Construction, today known as Tebcon Developers, which does building projects in Gauteng, Limpopo, Mpumalanga and North West.

The provincial governments were faced with massive infrastructure backlogs that needed to be addressed. They invited companies to help roll out the development of government buildings and housing. As a result, between 1997 and 1998 Tebcon became the biggest black construction company in Limpopo.

I ran the business alongside the brokerage firm very successfully for a few years, but then I got bored and I started investigating opportunities to take on new challenges and find ways to contribute meaningfully to the mainstream economy. That was how I moved into the mining sector.

The new Government had started opening up the country’s mineral resources and the Mining Charter had come into being. The Limpopo provincial government was selling shares in Anglo Platinum. They called for bids and I put in an offer. In December 2002, I led Sekoko Platinum, a company that successfully bid for the acquisition of 480 000 shares in Anglo American Platinum through a public tender process. This laid the foundation for Sekoko Resources.

But I also realised that I wanted to find a sustainable way to create new wealth from resources, and not just to own shares. I saw that in mining when you buy into an existing opportunity, the interest is very high.

I wanted to build my own Anglo American in a way that would enable local communities to profit too. I had courage because I had already become a successful businessman, and the time was ripe to seize the opportunities that were being made available.

Related: Lichaba Creations Founder Max Lichaba’s Inspiring Journey To Entrepreneurial Success

I developed an interest in resources and started to read and learn about the industry. I still had many political connections from my days as a student leader and trade unionist, but I refused to build my business on political connections. I wanted to do it by taking advantage of my own talents, skills and credibility. I am a firm believer in the fact that a business is built on the strengths of its founder.

Learning some tough lessons

I decided that the best way forward was to buy my own mineral rights. To do that, I consulted a geologist who helped me to identify various areas in Limpopo. Because the construction business had been so successful, I had managed to save R100 000.

I used this to pay the geologist’s fees and to cover the cost of submitting the application. I then put forward my application for mineral rights to Government. Not all prospecting rights requests submitted were successful, however, and mine was rejected.

That day, I was devastated. It was all the money I had saved; I had worked very long hours for it and there was nothing left. I spent the day alone, locked in my office. But by the end of that day I had reflected long and hard and I was resolute that there was no way I was going to let everything go down the drain.

Related: How Billion Rand Business USN Was Launched From A Small Kitchen

The process of putting the application together had taught me a lot, and I had been doing my own research into the mining and exploration sectors as well. I sat with my PA and we put together another application. This time it was successful, and I secured my first prospecting rights in the Soutpansberg.

Of course, once you have rights you have to use them or you lose them. But I had no money to develop the land I had acquired the rights to, so I went back to my community and I approached the local chiefs, women’s groups and disabled groups to become shareholders in the business.

We went on a two-day bosberaad during which we discussed ways to raise the money to enable exploration of the area I had secured. Within ten months, we managed to raise R1,5 million between us all, with me as the major investor and shareholder. The money came in dribs and drabs, a few thousand here and a few thousand there. But we got it.

Next, I appointed a consulting company to do the exploration. This is where I made the biggest mistake of my life. Money was so limited and as a new business I had no resources with which to do research into the contractors and their business history.

Needless to say, there was an internal dispute among the consultants and one of them disappeared overseas with the money I had raised from the community. To this day, he has never been found.

It had been difficult enough for me to deal with losing my own money early on in the game, but now I had to go back to a group of vulnerable people who had invested everything they owned in the business and tell them I had lost their money. There was just no way I was going to admit defeat. I could not let them down.

Building a mining empire

By this time, I had become very hands-on in the business and I was participating physically in all the site visits and going to the labs.

I had collected all the lab test results and kept copies of them in my own files. These pieces of information turned out to be a lifesaver. I started meeting with prospective investors and showing them that although I had no formal reports, I had the test results proving that there were vast coal deposits in the area.

The first company to understand the value of what I was holding in my hands was mining operator, Coal of Africa, which invested R55 million in the business there and then, laying the foundation for growth for Sekoko Resources.

The investment was amazing because it not only enabled the company to begin exploration, but it also meant that we had the capital to start on other exploration projects too.

Today we have projects on the go in the Soutpansberg, the Waterberg, Capricorn and the Eastern and Western Bushveld complexes in Limpopo. We have gone on to acquire the rights to vast holdings of the country’s rich coal, platinum and iron ore deposits.

Our shareholding, which includes the original members who continued to believe even after the loss of their R1,5 million, ensures that local communities in the area also benefit from the natural wealth of South Africa. This is a key consideration for me. Sekoko also promotes empowerment through preferred procurement and we work extensively with local businesses wherever possible. It’s vital to include local communities in this business so that they too can benefit.

My father is a priest and he taught us that on dry soil, no-one can reap a harvest. You have to provide people with opportunity if you want them to succeed. Our empowerment model was developed because I did not want the ordinary people living in and around the mining areas to be excluded from our mining empowerment transactions.

I never imagined that my life would turn out this way, or that I would be part of such a big mining company, but as the business opportunities unfolded my vision grew and I followed the dream.

I am driven by a sprit of entrepreneurship and by my faith, both of which have enabled me to look beyond what people normally see. Eight years down the line, Sekoko Resources is well funded and has never had to borrow money from the banks.

Related: How Bertus Albertse Overcame Adversity To Build A R80 Million Franchising Business

It is often said that your job is your second home, and I like my staff to feel that this is their second family. I see myself as a father figure, and I want to be respected as such. I think I have proved that I am not just a businessman who wants to enrich himself alone. We employ 32 people, all of whom have shares in the business.

I believe it is critical for them to know that they have ownership in everything they do. We have created a friendly work environment. I encourage our people to respect and trust one-another. In addition to the permanent employees, we have hundreds of consultants in the field so we provide employment for many people.

In 2008 we entered into a joint venture for two Waterberg coal projects with Firestone Energy, a Perth-based exploration company listed on the Australian and South African stock exchanges. Sekoko is now the majority shareholder of Firestone Energy and I am a director of the company. The Waterberg coal joint venture is playing a major role in helping to alleviate poverty in Limpopo, which has a high unemployment rate.

Related: Adrian Gore – The Disrupter

We are now working on listing Sekoko on the London Stock Exchange. There is a huge appetite for coal assets in the UK. We have prospecting rights on 27 coal farms measuring nearly 36 000 hectares in the Soutpansberg, and on eight farms measuring about 8 000 hectares in the Waterberg. Considering the future fuel and energy requirements in this country and abroad, this is of great strategic value to the company.

I am a spiritual person and my faith is an important part of my life. Last year The Tim Tebeila Foundation donated R7 million for the building of a church in Sekhukhune, the first of its kind in a rural area. The foundation helps feed the needy, including pensioners, the disabled and children in Limpopo.

I also sponsor a number of students at various universities. I am passionate about human development and helping to fight poverty. We regularly hand out clothing and food parcels to people who need them. Whatever we get from life, we must plough back into our communities and it will be multiplied many times. I believe that if Nelson Mandela could give the best of himself to this country, who am I not to do the same?

Invest your own sweat

Make sure your principles are clear and established. Then, stick to what you know best to generate income and save money. Do not borrow from others, but learn to create your own wealth. It’s vital to build your income on what you know how to do best. That’s what I did when I was in the insurance business, and it’s a principle I continue to apply even now.

It takes time to make money this way – it’s not something that can be achieved overnight or without much hard work and personal sacrifice – but it can be done. You cannot depend on government handouts if you want to create sustainable wealth for yourself and your investors.

Being able to earn money is fundamental to operating a successful business. I was prepared to invest my own sweat and my own efforts, and I believe that is what convinced others to come on board. Also, if you are serious about your business, don’t spend money on cars and big houses. Don’t confuse working capital with profit. First you must make the business work, then you can develop expensive tastes.

Discipline is key

In addition to my teaching diploma, I have participated in many specialised courses in marketing, business management and mining over the past years, but I have learnt my most valuable lessons in the course of doing business.

Related: How Mark Sham Earned His Suits & Sneakers

I don’t believe that the spirit of entrepreneurship can be taught, but I do believe you can learn the principles and then apply them in your business.

I draw a lot of inspiration from the stories of international entrepreneurs like Donald Trump. But I am also inspired by mining companies around the globe.

I am a disciplined person by nature, which is probably a result of the way I grew up. My wife Pollett and I married in 1998, and we now have four children. When I was single and focused on making money to survive, I worked solidly from Monday to Friday and kept any socialising strictly to weekends.

These days my free time is devoted to my family. I have also found it vital to spend time only with people who are positive. There are many negative detractors out there who do not have your best interests at heart.

As a business person, it is advisable to keep away from them as their gossip brings nothing into your life. Surrounding yourself with children is a good way to ensure that you only hear optimistic stories.

A long and winding road

1989

Tim Tebeila qualifies as a teacher and his first post is at a high school in Tembisa. At the end of that first year he is fired by the Department of Education for being an activist for change.

1991

He finds work as a teacher in Mpumalanga and supplements his meagre income by selling insurance in the evenings and on weekends.

1992

He leaves teaching and joins Sanlam where he becomes a successful broker, later moving back to Limpopo.

1995

He leaves Sanlam and opens his own brokerage, Morethi Insurance Brokers.

1996

Tebeila Building Construction is launched, carrying out building projects in Gauteng, Limpopo, Mpumalanga and North West. Between 1997 and 1998 it becomes the biggest black construction company in the country.

2000

Tebeila starts to develop an interest in mining and resources and loses R100 000, his life savings, by making an application for prospecting rights that is rejected.

2001

He raises R1,5 million from his own funds and from local community groups in Limpopo – who remain shareholders in the business to this day – to begin prospecting. The money is lost to an unscrupulous consultant.

2002

Armed with lab test results, he secures R55 million in capital from Coal for Africa. This paves the way for the expansion of Sekoko Resources.

2008

Sekoko enters into a joint venture for two local coal projects with Firestone Energy, a Perth-based exploration company listed on the Australian and South African stock exchanges. Sekoko becomes the majority shareholder of Firestone Energy.


Related: Watch List: 11 Teen Entrepreneurs Who Have Launched Successful Businesses

Monique Verduyn is a freelance writer. She has more than 12 years’ experience in writing for the corporate, SME, IT and entertainment sectors, and has interviewed many of South Africa’s most prominent business leaders and thinkers. Find her on Google+.

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5 Comments

5 Comments

  1. Michael Makate Makunutu

    Dec 22, 2011 at 15:58

    Wow….wow…inspired……

  2. Bra Jackie

    Aug 5, 2013 at 08:06

    yoh

  3. sicelo mayeza

    Nov 17, 2013 at 12:39

    I am inspired by your wise and motivational speech in church today(durban)

  4. Mthimunye Zozo

    Mar 10, 2016 at 10:47

    well said

  5. BasicShoe

    May 18, 2016 at 05:20

    Very inspiring indeed! There are few people today who have this kinda of work ethics. The guys is driven beyond an average person…. But he lost me there when he said some of his inspiration came from Donald Trump? They are way to different for him to get inspired by Trump. Nevertheless, may he continue to stay grounded and to be blessing because he bless others…

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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

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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

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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

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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.

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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

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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.

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