May 5, 2022

Chapter 9 — Getting Shit Wrong

Let’s face it, none of us like to get things wrong, but in digital delivery we know it’s all about fail fast. We learn immediately, we move on, we don’t make those mistakes again. It’s not quite the same in life and business. There’s a lot of emotional attachment from the start. I can’t share everything that didn’t quite go according to plan, but I’m writing this to give an open and honest account of the business. From a commercial perspective, I’m bound by some confidentiality as well as my own ethics.

Even if they’ve built a successful business, I think most entrepreneurs, on reflection, realise there’s a lot they could improve on next time round. Here’s the news — that’s absolutely ok. The healthiest ways of working are based around trying, failing, and coming at the problem from a different direction.

Manage your people, and manage your people management

I think there were certain types of people I needed to really get the party started, but they’re a different flavour to those I needed when the company began to scale and grow.

Those people who were needed from the beginning are the types who often love a scrappy startup with everyone mucking in. They start out reporting in to the CEO and, within 12 months that process changes, so it follows that many of the people change too. They were all pitching in, concurrently doing three roles on the delivery and working hard to deliver the deals I’d secured. This was all good, but I could see problems emerging as the business started to scale. Roles and responsibilities evolved, becoming more about directing than doing, and that was when the challenges grew more apparent. It hurt the business.

We were moving into a territory of becoming people-oriented, but we had a lot of task-oriented staff, and many of them didn’t have the experience of really managing people. It was a tricky period. We absolutely needed to deliver the work we were winning, but eventually the scales tipped in favour of the what rather than the how. It’s a cautionary tale. In a business where you need people around you, you’ll not always have the right people around you.

When mentioning people, and as I am a person, it also puts me in the firing line. I realise that makes it sound as though I just fired everyone in some mad Difrent version of The Apprentice, or just stomped around the office growling at everyone. I think we’re all accountable, and the point to writing this is around growing and learning as a person. Putting myself under the microscope here, I knew I would be the right CEO to grow the business to about 200 people, but anything bigger than that I didn’t have the experience. I hadn’t been responsible for making acquisitions, or integrating the businesses, and had no experience of raising money or the markets. This is why capping at 200 was a smart move and was a conscious decision that paid off.

Here’s the pre-takeaway takeaway: you need to know your own limitations and recognise the limitations of others. If you can do that, you can work out whether to grow those skills or bring in the people who already have that skill set in place. Emotion can get in the way when you’re so close to the business and the people you’re starting up with. Some of them just can’t do everything you throw their way. Or they don’t want to. Everyone has their own area of expertise: devs will never be content designers, and marketing people will never be delivery leads (or whatever other roles fit better!). That’s just how our world is.

Looking back, some mistakes seem easy to spot. Of course you see this at the time, but maybe it’s less obvious. Maybe your optimism and want for the work outweighs your better judgement. Often it’s not until you’re totally out of a situation that you can see it more pragmatically.

Know what you’re delivering

An early challenge was delivering business to clients with requirements outside of our expertise. Being honest, there was some business that we probably shouldn’t have gone after in the first place. Unsurprisingly, this was particularly difficult to deliver when we won it.

Typically, we had to learn this by getting it wrong. It’s one of those lessons you can apply to so many other situations — you knew it was wrong from the start, but still you wanted it. In our case, we were out there looking for business to enable us to earn and grow. We eventually realised that we needed to refine and define exactly what business we were looking for.

Difrent has always had a strong leaning towards the design side rather than the technical, mainly as I played the technical role from conception. Although I’ve held CTO and CIO roles, I always came at them from a heavy business perspective, rather than deeply technical. I’ve never coded and I doubt you could entice me to. The closest I ever came was for some work I did with Dinis Cruz as a spin-off from Wardley Mapping, but it never quite happened. People and limitations, eh? Three and a half years after Difrent landed, we got our first Head of Technology (Larcs). This was at least a couple of years too late in my view, but again, more learning for the future.

We won a very technical piece of delivery for a central government client and, admittedly, we were too lax when we scoped up the approach to the work. This piece had already publicly failed for others and we were attempt number three or four. It was quite a daunting prospect, some might say a bit of a poisoned chalice. The person on our side responsible for scoping the work wasn’t technical enough and we undercooked the effort it would take to make this happen.

We did manage to come through that piece of work, although not entirely unscathed. Our reputation was still intact, but it was costly because of the delivery time. We had all hands on deck, but hadn’t anticipated the resources needed. This was also the first time we’d needed legal advice during a project. Thankfully. And we worked for that client a number of times afterwards. For me, it taught a valuable lesson about really making sure we knew what we were bidding on and whether or not we could deliver!

With hindsight, I can say that particular project was unnecessarily stressful, and I don’t believe we should’ve won the work. It was totally the wrong fit for us and we shouldn’t have gone after it in the first place. I would urge anyone who’s thinking about building a company like Difrent to play to your strengths — and I mean really double down on those strengths. It’s so hard at the outset because you will chase absolutely everything.

Learn to take the right risks

Something I’ve learnt about myself in building a company is my approach to risk. This was certainly true in the first 12 to 24 months. I was very focused on what we spent and how we invested time and money. Sales, or rather salespeople, was something else I was cautious about. I think the essence of these subheadings definitely merge. People management and taking the right risks intertwine, and knowing what you’re delivering encompasses both.

I can say with my tongue firmly in my cheek that, as a business that aimed to be people-centred, most of the problems we encountered were from people! I’m sure you know what I mean here! I may mean more about personnel in general, but also the bigger picture is about my own mindset. On closer inspection, I know I was very apprehensive about investing in salespeople. I wasn’t without my reasons. I haven’t seen that much success from them in this business — not just in Difrent, but within the world of central government and NHS — so I didn’t have a huge belief in it from day one. I just wasn’t sold on salespeople. I knew I’d been doing it myself and I knew I could do it well. It goes back to being the face of the company and, to me, the face of the company was the biggest part of sales and marketing. It was the role I naturally assumed and remained responsible for. In short, it was my thing. My area. To this day probably 80% of the business that came into the organisation was generated through my relationships and networks. I’m not a control freak. Honest! My reluctance was more based on awareness and aversion, rather than my ego.

Another thing to consider with salespeople was about spending in general. I’d never been cautious with money until Difrent because I’d never needed to be. So, was it worth spending on another salaried position when I was already doing it myself? Well, it’s a balancing act. On a double-edged sword. You have to take that leap of faith and sometimes it’s nice to be proven wrong. My caution was also based upon knowing the difference between failing fast in an Agile sense, and giving someone a job and then telling them it’s not working out.

I was sceptical about seeing value for anything we spent and, with growth in mind, there has to be some risk and there has to be some spending attached to it. Not wanting to spend money unnecessarily is very different from not needing to spend money unnecessarily. There’s got to be a right time for everything and the key is to be able to recognise that. You have to look at the long game. If we were just throwing money around, it would never look good to a potential buyer. The reverse question to my conundrum would be, Why didn’t you invest in a salesperson? I’d be the worst kind of business owner if my answer was that I just tried to do everything myself!

This segues nicely into salaries. I think we got the mix wrong when it came to staffing in those earlier days in Chiswick. We should have had more billable members of staff than the 50/50 split we had with interims. Our future model would be a split of 70/30. In a half and half scenario, it was costing us. As you may know, contractors charge daily rates for their expertise, and those daily rates are higher because they come onboard with none of the perks or benefits that a permy has. For example, contractors don’t get sick pay or holiday pay. They have ongoing limited company overheads, accountancy fees, the stress of short-term contracts and termination, and basically have to be a bit more active than just turning up to do a day’s graft. Don’t get me wrong, I don’t mean permanents are passive and have it easy, it’s just that their processes are covered off in the business, whereas a contractor does all that themselves. It stands to reason that having more permanent staff will cost the company less.

In terms of being a fat cat CEO on a huge salary, well, in my first year I didn’t take a penny or expense anything from the business. In years two and three I was on £85k, and then it got more inline with CEOs of a scaleup. I never expensed anything like travel or food. In fact, I can only think of two members of staff who ever expensed for meals in the life of Difrent. They’ll remain nameless, of course! It just wasn’t a thing for us or that we set a rule. It was more an ingrained trait based on saving, not wasting.

In our personal lives, we may repeatedly hear, You never learn, do you? You can’t hear those words more than a couple of times in business — there’s too much riding on it. You can be the biggest risk to your business by not taking risks, but you need to know when to take controlled risks. Do it by setting expectations and goals, and see what the return on investment will be at checkpoints in the company’s lifecycle. Assess and reassess. When it’s your own company, to relinquish control in any area takes a lot. Getting anything wrong is a lesson, not a weakness. So do it, and continue doing it.

A huge part of Difrent can be boiled down to people. There will always be issues to iron out along the way, and that’s just life. With people comes emotion, and with emotion comes conflict, and with conflict comes drama. The challenges are real, but the positives and the massive wins will always outweigh that for me.

My takeaways

  1. Understand your personal appetite for risk. This influences how fast things go, what you spend, how much sleep you’ll get and, most importantly, how you handle things when they go tits up. Which they inevitably will. A lot!
  2. To be successful in business you need to be able to lead, manage, and give constructive feedback. As ‘the boss’, you’ve got to be able to handle more extreme criticism from the workforce. Being everyone’s mate won’t cut the mustard!
  3. Make sure you have a reasonable understanding of finance. You don’t need to love it, but, as the saying goes, You do the math — literally! At least until the company is big enough to have someone do it for you.
  4. Don’t go chasing absolutely everything. Even if you do win some of that business, it’ll just make life very hard trying to turn it into a reality.
  5. Know when to stop doing and start directing. If you can’t back yourself you’ll struggle. You absolutely cannot build and run a business alone.

What helped me get shit right

  1. Knowing what ARCI is. It gave the ability to clearly articulate who is Accountable, Responsible, Consulted and Informed — great for clarifying who does what in the business.
  2. Finding a robust tool for the Business Plan. Latterly, I was introduced to Saleforce’s V2MOM which is good, but a mechanism for quarterly reviews and being held to account would have been better for us.
  3. Tracking Profit and Loss. This is ‘Business 101’ stuff and sounds really obvious, but keep it at the forefront. It was a lot easier to keep track of as a limited company. Forecasting is still a dark art, but it gets easier if you have a view of how much is coming in, and how realistic it is. The nature of our business is that you rarely know what’s happening longer than 3 months out.
  4. Reading reference books and online resources, investing in paid-for resources, accessing free business advice centres, as well as mentoring.
  5. It goes without saying, but I’m saying it at this point, that you should go back and read tips 1 to 4 again. Get them in place a lot earlier, but look to constantly review, rethink, and iterate as your business grows.

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