Three lessons in collaboration from The Apprentice

There’s been some interesting criticisms of the BBC’s The Apprentice over the last couple of weeks.

The Business Secretary said it is a bad example of business, whilst social enterprise bodies have begun a campaign for a ‘social apprentice’ because, rightly it seems, The Apprentice misrepresents what inspires people into business today.

But, for all its lack of reality, watching The Apprentice I’m struck by how much it tells us about the role of collaboration, teams and trust in business.

Here are three lessons, though there’ll be more.

– The project managers that are most successful show ‘collaborative leadership’ skills – they listen to their team members, give people roles they are best at, devolve responsibility and make the decisions when others don’t or can’t.

– The teams that are the most successful listen closely to what the customers want, give them what they ask for and a little bit more, and keep checking they are continuing to give it to them. They take the time to engage with the customer.

– The candidates that are most successful combine independence and co-operation in equal measure. They are willing and able to take responsibility, plan and get stuff done; but they also build a strong and positive relationship with others.

Of course, the boardroom is never collaborative and the fact that every business they set up is a one-off means that they don’t need to build the relationship or trust with suppliers or customers that a real business would. It’s reality TV after all.

But, by looking at what makes for success on The Apprentice you can see why collaboration, teamwork and trust are central to doing business.


The Co-operative Bank and the co-operative economy

Until a month ago, when the Co-operative Bank’s problems began to surface, it was regularly said that co-operatives are enjoying a renaissance. A new report on the co-operative sector shows that the recent difficulties at the Bank should be seen as an anomaly, not an example of the UK’s co-operative economy.

There are two arguments forwarded as to why co-operatives are enjoying a renaissance. First, customers are turning to known, trusted businesses and co-operatives exemplify this, both in the UK and elsewhere. Second, co-operatives are showing stronger financial resilience because they are not owned by outside investors and therefore are able to think long term rather than bow to short term shareholder pressure.

Both are simplifications of a complex business landscape, but as shown in Co-operatives UK’s new report,Homegrown: The UK Co-operative Economy 2013, both contain kernels of truth.

The recent revelations about the Co-operative Bank – which pulled out of a major deal to buy Lloyds bank branches, was subsequently downgraded by Moody’s to ‘junk’ status and then revealed a capital hole of £1.5 billion that resulted in a partial stock market flotation – has put both of these into question.

The Co-operative Bank is, after all, an iconic UK co-operative brand with very high levels of trust precisely because it is a mutually owned bank. Although it is a small part of the co-operative sector, accounting for only about 6% of the sector’s turnover, the knock on effect of the Bank’s high profile problems for other co-operative and mutual businesses are potentially huge.

Homegrown, though, shows that regardless of whether or not the Bank’s problems are significant as reported in the press, we must not extrapolate from the Bank to the wider co-operative sector.

– Co-operatives, the annual report shows, have grown year on year since the start of the credit crunch. Since 2008 turnover has grown by 23%, the number of members by 36%, and the number of co-operatives by 28%. The sector is growing at a startling rate in a terrible economic climate.

– It shows that trust in co-operatives is high. 52% of people describe co-operatives as trusted, whilst only 7% – yes 7! – say the same of PLCs.

– It shows that this can’t be down to one or two businesses. There are over 6,000 co-operative businesses. High profile examples like The Co-operative Group and John Lewis, but other also other large yet less well known businesses like Milk Link, First Milk, Midcounties Co-operative, Unimer, and many others.

– And it shows that co-operatives aren’t working in boom industries – the vast majority of the co-operative sector is made up of retailers and farmers, hardly two sectors you’d put money on to thrive over the last few years.

Clearly, co-operatives are no panacea for a struggling economy. They need to compete, financing growth is difficult, they suffer from many of the management issues other businesses have. The Co-operative Bank illustrates that.

But even the Financial Times, one of the papers most critical of the Co-operative Bank’s bid for expansion, recognised that the Co-operative Bank is an anomaly, not an example of the co-operative economy:

“Co-operative businesses grew in number, turnover and jobs last year, underlining the movement’s resurgence despite the travails of the Co-operative Group.”

Otaku, purple cows, remarkable businesses

A review of Purple Cow: transform your business by being remarkable, by Seth Godin, 2003

I’ve just finished re-reading Purple Cow by Seth Godin. It’s a classic business book that has helped shift the way that business thinking and practice has developed over the last decade to focus on niches, entrepreneurialism, focusing on products, brand ambassadors and spreading ideas

He begins the book with the insight that marketing has fundamentally moved away from the ‘TV Industrial Complex’, where big companies made ‘average products for average people’ because they got economies of scale through mass production and mass advertising.

Marketing, he says, is no longer about spending lots of money on advertising, it’s about providing for a niche market and creating for them a remarkable product or service that stands out from the crowd – a purple cow in the midst of normal cows.

Like Seth’s blog and other books, Purple Cow brims with great stories, anecdotes, ideas and business advice that would cost a fortune.

There’s an element of repetition about it – Purple Cow is one big idea illustrated through various examples, and if you read Seth’s other work then the explanations about why the world of marketing has changed will seem familiar.

But that’s a minor criticism. Purple Cow is a remarkable book.

Here are the four big things to take away, I think:

1. There’s no point in selling a product or idea to everyone – most of them aren’t listening. You need to focus on getting early adopters and innovators to take it on, people who like new exciting different things. They – if they’re impressed – will pass it on to others who like new things and gradually it will catch on. It’s through early adopters and those he calls ‘sneezers’ – well networked and vocal early adopters – that you get ideas to spread.

So, start with people interested in your products who are well networked and collaborate with them, give them a sense of involvement and ownership of a great product; if you impress and engage them they will spread the idea.

2. Micro-enterprises and small businesses can flourish by developing a product for niche markets. Seth gives examples like the world’s loudest car speakers and sci – fi conventions. These products have devotees because people feel passionate, borderline obsessive, about them – what Seth says the Japanese call ‘otaku’.

It’s a point made earlier in Chris Anderson’s Long Tail, who talks about the technology that enables businesses to find niche markets; Seth focuses on people not technology and explains why people are motivated to find a niche product and what businesses must do if they want to tap into these niches or ‘tribes’.

3. A remarkable business is one that creates something that a niche or tribe of people want and then engages with them rather than sells to them.

It’s an obvious but very hard thing to do. Businesses get distracted – by saving money, by avoiding risk, by creating something of wider appeal. And once you’ve done that you’ve lost it.

The lesson is to engage, collaborate, talk, support and be part of the niche – and create something they want rather than something you want them to want.

4. And perhaps the biggest learning point is that remarkable businesses do not need to be large PLCs or big businesses. In fact, Seth implies quite the opposite. Successful businesses today come in all shapes – the key is that the business focuses on a niche, it gives the most vocal early adopters ownership and involvement, and that its employees are motivated by desire for a remarkable product.

This favours a variety of ownership structures – micro- enterprises made up of passionate geeks, employee owned businesses where everyone cares, consumers with an ownership stake in a business . . .

These and other engaged, responsive and collaborative ownership models are perfectly suited to creating remarkable products for otaku driven tribes.

Ownership implications of the Co-operative Bank flotation

The Co-operative Bank will raise the £1 billion it needs to plug its capital hole by selling shares on the stock market.

This signals a major shift in ownership of the Bank, giving outside investors a significant share for the first time.

There are some significant implications for business ownership here, both for the Co-operative Bank’s current and soon to be owners, and for businesses more widely.

1. Member control. The stock market flotation won’t result in a demutualisation. The new investors will have between them less than 50% ownership of the Bank, with The Co-operative Group (which previously wholly owned the Bank) holding controlling shares.

The Co-operative Group is, in turn, owned by its six million customer members, meaning that the customer members will continue to have control, albeit shared with outside investors.

In any mutual there are always productive tensions between the members and the executives; the introduction of a new class of investor members focused on profit will add an additional dimension and shift more control from customer members.

2. Complexity. The new class of members also adds a further level of complexity into the ownership structure.

The Co-operative Group has always had a mix of owners: a small number of corporate members, which are businesses that use The Co-operative Group, sit alongside millions of individual customers. The business has always dealt with this complexity and now it will have another set of owner investors to deal with too. The interests of shareholders, individual and corporate members may sometimes be aligned, but in areas like ethics and long term vs short term profitability perhaps less so. Time will tell on this.

3. Investors. Another interesting implication is for the stock market investors. There are mixed models out combining member owners and investor owners. Circle, the private health provider, for example, is owned 49.9% by employees and the remainder by investors through a PLC. But not many.

It will be interesting to see what impact this model will have on shareholders. Will they see the benefits of sharing ownership with business and individual customers? Will it put investors off? How will these groups relate to one another and to the executive team?

4. A new model? And, finally, will other businesses see the benefits of attracting capital from investors whilst keeping ownership in the business through a customer or employee ownership model? Might we see more of these models emerge? Maybe not in the immediate term, whilst the Bank deals with some reputation issues, but longer term perhaps. After all it’s a good approach for mixing investment and member ownership and this offers a high profile example and test bed.