Time to invest in our ability to sell
Wales Business — By Walter May on August 23, 2010 7:00 am
Four letters, one big word
WHY ARE Welsh businesses so unsuccessful? It’s a crucial question – and with an economic slowdown and predicted double dip recession, businesses are again reviewing their order book and cost structures in readiness to take the appropriate action. Most will probably look to cut costs rather than increase sales.
But taking a long hard look at sales effectiveness through efficient process improvements is an equally vital discipline.
Business survival and growth is the most challenging for companies that have the greatest potential to provide long-term, intellectually-based jobs. And it’s these jobs which are so desired by the Welsh Assembly Government and the people of Wales. But it’s not the lack of ideas or the resources to transform those into technological advance products that’s the problem; it’s the inability to match often leading-edge solutions to their market.
We seemingly lack the creative ability to sell. The challenge facing young companies is how to develop a repeatable process that can effectively sell a new or improved way of addressing a business-critical problem in purely business terms. Gaining access to top executives within some of the countries or the world’s largest companies is a prerequisite to winning business quickly and at a level that can deliver high sustainable growth.
The Welsh Assembly Government must be lauded in its desire and commitment to creating knowledge-based businesses, and supporting them through the various stages of development. However, there is a clear chasm when it comes to the sales or growth phase. Far too many businesses are failing or being consumed by foreign companies all too eager to get their hands on valuable intellectual property on the cheap.
There is a distinct lack of a sales culture in Wales and Welsh business. Business leaders rarely invest intellectual effort to determine who they should pro-actively seek to adopt as customers and merely default to, reactively, wasting precious resources doing low quality deals that they often live to regret.
Like no other profession, everyone thinks they know how to sell. That may be true when selling commodities where the overriding decision criteria is price, but patently untrue at the other end of the spectrum, when providing intangible, multi-million pound, business-critical solutions to large corporates.
It has been claimed that the main reason many outstanding Welsh businesses failed in the past is due to their inability to win enough new customers. This is still true today. Unfortunately, companies large and small, mature or start-up businesses build a website, post some adverts and sit back and wait for the phone to ring – and usually it doesn’t.
We have some fantastic businesses in Wales with huge potential. I passionately believe we need to establish a sales culture within Welsh business, in order to fully exploit our talents and establish truly independent world-class businesses. We also have a fantastic research capability within the Welsh and UK university sector. Unfortunately, much of the research fails to impact business performance in any meaningful ways.
There are key business processes that young companies need to excel at in order to ensure their businesses survive and grow. Why not harness the university-based research in best practice in key business processes via an academy or centre of excellence and expose all Welsh business leaders to new best practice, lean ways of doing business that would allow them to compete and win?
Let’s start with sales and give our young companies the boost they need to become world class businesses of tomorrow sooner than would otherwise be the case.
Tags: Economy, entrepreneurialism, research and development, Welsh economy
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17 Comments
“it’s the inability to match often leading-edge solutions to their market.”
Conversely it is the inability of companies to metaphorically sit in their prospective client’s seats and to ascertain their real or even future requirements – something that does not seem to be taught at many of our business schools.
Also there is a requirement to understand and be able to work with the culture of doing business in any particular market sector or country.
Once these parameters have been established and it is confirmed that the right product/service is being offered at a competitive price, then there has to be the planned and positive approach to that marketplace – in other words – go out there and market that product/service. It is not that difficult but does require some financial resources as sales often do take time to mature.
A proficiency in the relevant language will make it easier to cross many bridges – something again that our education system is increasingly failing its pupils. As I scientist, I left school with a good proficiency in four languages and over time, acquired a working knowledge of another half dozen.
My experience does not agree with your recommendation regarding the use of academia, as usually their time-scales and sense of urgency are not those required by a commercial operation. I have found the best advice and experience is to be found from a relevant trade assosciation (sector or country based), a good commercial department of an embassy or just speaking to and networking with people who already have experience of that marketplace. These facets are often harder to find in Wales.
I agree with many of your comments. However, I disagree with the use of trade associations or embassy commercial departments. These routes and more specific channels have failed to deliver for the high tech sector whose needs are best served by other, more direct methods with predictable outcomes.
None of the barriers you raise are insurmountable with the right attitude, creative thinking, focus and drive. The University sector could easily be aligned with the specific needs of high potential businesses. They have so much knowledge and expertise of direct and immediate value to ambitious companies. My proposition would be a central “Centre of Excellence” that would link academia to business, focussed on the ‘key business processes’ that will ensure success and drive growth.
I believe the problem is well understood, it was well articulated to me by Rhodri Morgan six years ago. We now need to focus on finding solutions that leverage existing resources and are cost neutral.
Some years ago when we were planning to make to move back to Wales, my step son was going to live with us but attend a virtual High school based in the US http://edison54jt.schoolfusion.us/modules/cms/pages.phtml?pageid=185448&sessionid=a4c5655fa9d082e3a9b658482be8ce63&sessionid=a4c5655fa9d082e3a9b658482be8ce63
There was a program was associated with a small school district as a sort of a dispersed campus. I was approached with introducing the program to Wales, however we did not move, and I had lost the information, however it did sound like an interesting program for small schools.
A subject not directly linked to the referendum!
Nevertheless it does have some relevance as the promise in 1997 being there was an economic dividend to devolution. It was quantified as moving Wales up the economic league table to above the average and to a percentile of 80%. The sad reality that after ten years of devolution Wales had fallen to bottom of the league and to only 70%.
As an evaluation, the failure of devolution to produce the promised economic dividend and the continuing economic decline of Wales could suggest that the experiment of devolution should now be ended.
The fault was in the belief that a regional administration could, somehow or another, achieve what the larger more distant governance couldn’t. It also made the incorrect assumption that the State could create wealth.
However, as miserable the end result may be, devolution isn’t entirely or primarily to blame. Wales suffers from the same regional disadvantages as the other those areas north and west of the Severn-Wash divide. The other regions have been more successful than the Welsh Assembly Government and to that extent devolution has not brought economic prosperity to Wales.
There is a strong geographical factor in the concentration of technological development with London, having strong local demand and international connections, possessing significant advantages. Wales is a tollbooth too far on the M4 corridor. These factors are probably more important than the observation “There is a distinct lack of a sales culture in Wales and Welsh business.”
Wales has its problems but the most important is that London and the motorway corridors represent something like ten times the demand and supply of Wales. This can only mean salaries will be higher outside Wales than inside it. People in the nineteenth century followed the higher wages, which is why so many entered Wales 150 years ago, and also why many of the educated young of today leave Wales.
I write from experience, having been in sales and marketing for most of my working life. Most of my selling activity and success was in England because that’s where the demand and better prices are. I write from experience because two of my university educated children live and work in England because they have better paid work than they could obtain in Wales.
It is a folly for us to believe that devolution has an economic dividend and that through it Wales will become wealthier. A better financial solution would be to move Wales east down the M4…and in the interim abolish the toll on the bridges, speed up electrification of the main London to Swansea rail line and bypass Newport. It would probably be more economically productive for the WAG to redirect the aircraft that leave Cardiff for Anglesey to London City airport.
Len, your comments are valid and strengthen my case. We need to focus our resources on the things we can control and because of the disadvantages you describe, we must make sure we work harder and excel in all business disciplines.
We can create and develop international businesses here in Wales and beat our South East competitors. A ‘can do’ Sales culture is a great place to start. Having worked most of my career for US technology companies and we could do worse than adopt many of their business practices and ‘mind set’.
Walter May
One of the problems in Wales is that people with money are seemingly risk adverse… at least in supporting Welsh entrepreneurs. There was an item on TV recently where a gentleman ‘invested’ £20,000 with a phone-in finance company… and discovered it to be a scam…and lost his money. Local entrepreneurs would find it extremely difficult to raise that sum of money from internal investment. Case in point: a friend of mine, a research scientist, developed a patented product which I have helped to bring to a marketable position. We tried to raise funds within Wales and failed. I was able to get the funds from an investor in Hertfordshire. The logic is that entrepreneurs are better off going up the M4. If the funds come from England the ultimate consequence is that the adminstration will go to England.
The other problem is the attitude of, if it is ‘Welsh’ it can’t be any good or successful. Not every invention and project will succeed but not everyone will fail and some will develop into high capital return ventures. We need people who may not want to gamble but are prepared to develop a mixed risk portfolio.
Another is the unwillingness of people to take a lifestyle risk and commit themselves to taking on a product and working at it so it will succeed. Until we have Welsh style Texans we will contiue to struggle. The problem isn’t intrinsically devolution.. it is us, we ourselves.
“It is us, we ourselves.”
Here is to Len Price talking up the ability of us Welshies to improve our own lot and run our own affairs?
You heard it here first.
I believe our lack of national status poisons our ability to invest and back ourselves in areas such as starting up businesses. You don’t see American’s talking themselves down, or indeed Texans. We have a merry, elite and pretty vocal lot talking Wales down all the time…
Marcus Warner
“The fault, dear Brutus, lies not in our stars, but in ourselves if we are underlings.”
We have had plenty of entrepreneurs in the past – people like Pryce Jones of Newtown who started the first mail order company in the world, David Davies of Llandinam (before nationalisation many coalowners were Welsh), the Cardis & the milk trade in London. It’s ridiculous for people to suggest that somehow there is a fault in the Welsh that doesn’t allow them to be entrepreneurial.
Perhaps the present day problems arise from the collapse of the coal industry from the 1920s onwards, resulting in the rise of the Labour party with its crusade for social justice, understandable at a time of deprivation, and a culture thereby evolving based on wealth re-distribution & not wealth creation.
If you take Lens comment about “Wales falling to the bottom of the league” during the first decade of devolution at face value, you might be misled.
The Welsh economy grew throughout the first decade of devolution and disposable household income grew faster in Wales than most other regions and nations in the UK. Private sector employment also grew in Wales at a faster rate than England, and public sector employment in Wales grew at below the UK average rather than above it.
Devolution has not made people in Wales materially worse off, it is only when we insist on trying to validate ourselves with comparisons to the SE of England that we fall short. Those comparisons are a waste of time, we will never have a similar standard of GVA to most of England, we don’t even have electric railways. Judging devolution by competition is flawed and unfair. Judge it by popular appeal instead.
Illtyd Luke
“validate ourselves with comparisons”
It is the only thing we can do. You have done it yourself in saying “The Welsh economy grew throughout the first decade of devolution and disposable household income grew faster in Wales than most other regions and nations in the UK”.
Over a period of time the growth has not matched the growth of the other egions or we wouldn’t now be at the bottom of the league. Devolution with its promise of greater growth has not raised economic wellbeing inside Wales either to internal or external standards. The comment “judging devolution by competition is flawed” is itself flawed as the only thing we can do is to go by the end result. Devolution is Wales hasn’t achieved the promised economic targets.
Len, Illtyd
You both seem to have gone off on a tangent. If you want a debate on devolution write an article and go from there.
More to the point why not try putting yourself in the shoes of a “Welsh Entrepreneur” and envisage the challenges they face in developing their business. The problem I tried to focus on in my article was very well demonstrated in Monday’s Dragons Den.
The two Swansea based Entrepreneurs lacked any Sales knowledge and only narrowly secured investment, ending up giving away too much equity. If they had been better prepared (I assume they hadn’t received any professional advice), especially on the sales front, they may have had a less torrid time and secured more favourable terms. Early sales success and cash flow may have negated the need for investment altogether.
The “report” by Walter May taken into conjunction with other articles by acknowledged experts in business gives all welsh people great cause for concern about the future economic well being of this part of the United Kingdom. Since 1999 the welsh economy has benefitted from huge increases in public expenditure from UK government and also funding from EU,however statistics would indicate that our economic performance is relatively going backwards. If you add in the performance of welsh education which again seems to be showing improvements,but not in relation to other parts of UK then what is the future going to look like with the major cuts coming in public expenditure.The “location” of wales(which itself in reality does not consist of single economic entity) is not favoured as the the main market for UK good is the european mainland which is located on the easter part of england. To over come such natural barriers then must either be direct subsidies to employ people in productive work,or you have to have extremely clever people,and with necessary business skills to correct such imbalances. The “devolution” exercise was sold to a pretty “sceptical” audience on basis that by giving power to welsh politicians would mean the “backwardness” of wales would be corrected,however in the last 10 years it appears that it has not worked. The decision by WAG to destroy the WDA was purely “political” as the powers that be in cardiff wanted the direct power over civil servants,rather than having acknowledged “experts” at arms length. Without significant investments (where is money coming from),in education by bring back grammar schools,improvements to road links to southern england,together with high speed trains and many other things we are going to become even more poorer,with best of young people leaving for work elsewhere.
Walter May
Apologise…
I am very much in the shoes of a Welsh entrepreneur… I am trying to put a product onto the market…and have spent the morning at a meeting working towards that objective.
The difficulty of putting a new business with a new product onto the market are considerable. The collection of necessary skills is probably beyond most new entrants. One of the subjects discussed this morning was the need for a source of risk funds and a suggestion was made, through Xenos or similar, to create a group of risk portfolios in which a number of investor could put in multiples of £1,000 in a number of different funds so that the risk and reward was spread. The fund providers could then help the new venture with other skills such as marketing and intellectual protection and so on.
The approach could be described as ‘nursery’. I have devised a business development process based on experience that helps identifies the steps and stages of taking a product/business forward. Another suggestion made this morning was use of ‘grey knowledge’ – retired or semi-retired business people performing the role of mentor.
The Swansea entrepreneurs would probably received better help within Wales by this method than Dragon’s Den. Perhaps there’s an opportunity for initiating a PenDragon Group with the objective of attracting entrepreneurs, investors and mentors and bringing them together.
PenDragon could replace the recent changes in SME help and funding by WAG.
Walter May
I’ve had the opportunity to look at Monday’s Dragon Den.
Painful to watch.
The couple were truly to the slaughter led.
A local PenDragon advice centre where the help they needed was defined and supported would have avoided the problems. The figure of 38,000,000 was a death knell… it was obvious senseless.
There is enough business expertise in Wales to provide the help they needed.
Sad to see.
If you are interested in discussing the subject… contact me.
Howell, Len
Far from being a cause for concern, correct diagnosis of a problem is a positive situation. You can then begin to formulate solutions.
Rather than harp on about the mistakes of the past and wallow in self pity, I prefer to focus on the positive and be part of the solution. I am passionate about Welsh business and am currently working on addressing, a long overdue structural failure in support of Entrepreneurs. Put simply, there are key business processes that companies need to excel at in order to survive and grow. We should be able to define these processes, establish ‘best practice’ and lean methods which can then be implemented by our young companies with the assistance of existing or recently retired CEO’s that have specific domain experience. Academia also has a key role to play. This project is being done in conjunction with UWIC and a report will be published in September followed by a commercialisation thereafter.
Len, why not be part of the solution and join the “Welsh Entrepreneurs” group on LinkedIn?
Wow – lots of interesting discussions here but the fundamental problem seems pretty simple to grasp “Great products and solutions do not equal successful profitable businesses”. There appears to be poor understanding of the difference between Sales and Marketing!
Coming up with an innovative idea is just half the battle and wasting time, effort and money on increasing awareness and educating a marketplace you know very little about is the fastest way to going bust so no wonder people don’t want to invest in start-ups who don’t have a clear vision of how success can be achieved.
Understanding your target audience and the real pain points that your product / solution can overcome are critical in gaining access to senior people within your ideal customer targets not only to validate your value proposition, but equally to help you quickly refine this proposition to allow you to capitalise in the Global markets we can all compete in.
Having access to industry based expertise (as Walter has suggested) is critical to being able to take these value propositions to market. This allows businesses to focus on the most important end goal – gaining customers!
Marketing does not secure customers – selling secures customers and developing an environment where budding entrepreneurs can easily access this key skill is essential to the WAG achieving their objectives with driving success of knowledge based businesses in Wales.