Archive for Life Skills

Dealing with the unpredictable

It’s a sad fact of life that you can’t pay your mortgage, utility bills or the local supermarket with magic beans or ‘valid for one back rub’ vouchers. They tend to want money. Money is not necessarily hard to come by once you start your own business, but its arrival can be a lot more unpredictable. Are you comfortable not having a predictable salary?

If you are, let’s take a look at ways you can manage the situation. If you’re not, perhaps looking at strategies for dealing with an unpredictable income will make you feel more comfortable about it. A good first step when dealing with an unpredictable salary is to pay yourself a predictable salary.

That may sound obtuse, but paying yourself is crucial for getting to grips with your finances. You need to escape the situation where all your money arrives in the same account and you take what you need at the end of each month – not just to ensure that your company’s value is not skewed by your salary’s absence if and when you come to grow or sell but to give yourself a starting point.

It doesn’t matter (initially) if you’re not paying yourself competitively with regards to what you would be making in a large business or organisation, just that you’re paying yourself something. In terms of your personal finances, it’s easier to work with a very small but predictable income than a fluctuating mess.

Separate your personal finances from those of your business. Work out your own bare bones personal survival budget if need be. Use this budget to set your wages, not what someone you’re your skills and experience would be earning right now in a City job. Factor yourself into your business budget as an employee who must be payed and you’ll ensure that you are.

Taking from a kitty as and when makes an unpredictable situation even more so. Inject a sense of stability into your finances, even if it means you’re paying yourself less than you might have allocated to yourself in (some) months gone by. Add some stability to your business budget too by getting an accountant.

Firstly, you might not be good at accounting. Most people aren’t. Getting it wrong can seriously cost you – far more than an accountant’s fees. Secondly, think of the psychological aspect. Most people find accounting difficult, many find it downright unpleasant. Whether you’re sick through worry or hacked off at the inconvenience – you’re not in a good place and your business will suffer.

Thirdly, (which is where we draw in those who could do it themselves) every second spent on your books is one second less getting out there and doing the thing you do. It’s universally agreed that time is the most precious resource for a new business. Doing things yourself is very often a false economy as it takes you away from your own role.

It’s a plan that can evolve. Eventually, if you feel you’re earning enough you can give yourself a raise. Your personal budget can then begin to include emergency savings and priority savings. At some point you can supplement an accountant with a bookkeeper to provide year round support and free up more billable hours for you.

Nobody knows precisely how many iPhones will be sold each year or how many eBooks will be sold, but Apple and Amazon do okay. At the highest level, every business has an unpredictable income. By the time it filters down to staff the differences are less obvious. You just happen to be at the highest level of your business. Take pride in that, introduce some stability and predictability will filter down.

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Can you say “no” and feel ok about it?

C.B. Fry was a remarkable man. Well into his seventies he performed his trademark party trick of a backward standing jump onto a mantelpiece; but this was just one of his talents. He played football in an FA Cup Final for Southampton, captained Sussex and England at cricket, played rugby for the Barbarians and held the world long jump record. In 1920 he was reputedly offered, and chose to turn down, the throne of Albania. As a man with an ambition for politics as well as sport, who had been frustrated three times in his efforts to become an MP in his own country, the offer to become the head of state of a nation must have been tempting. No details are recorded of the exchange, other than the fact that he was approached, and his reasons for declining are unknown. However, I imagine that most people (regardless of their ideas about Albania or the concept of monarchy) would experience at least some difficulty in passing up the opportunity to become royalty.

Sometimes you have to have the courage to say no to a business opportunity. It took me considerable time to learn to decline business opportunities and feel ok about it. I have four criteria which I apply and, if I were even to think about taking on a new piece of business without all four criteria being satisfied, I would need to have a serious talk with myself. History has shown that if I forget this discipline it tends to come back and haunt me. My four criteria are:

  • I only want to work with and for people I like
  • I only want to do interesting work
  • I want to make money but not be greedy
  • I want to have fun

During difficult economic times such as these, we are inclined to take on everyone who comes through the door. However, undertaking the wrong project can be just as damaging as turning down a golden opportunity, with potentially longer lasting damage. My criteria are, admittedly, personal ones for me and do not form a model for anyone to adopt but there are more universal, practical reasons for declining work.

Confidence in one’s own ability is commendable, but committing yourself to a project for which you have inadequate skills is a bad idea. We all like to be challenged and work that pushes you beyond your niche area of expertise can play a part in keeping things interesting, but if the Venn diagram of the required skills and your own skills does not overlap sufficiently you can be setting yourself up for trouble. If all you are bringing to the table is the fact that you are a quick learner then you could be embarking on a very unpleasant journey that could leave a permanent stain on your credentials and reputation.

It is important to be realistic about your resources. Time is finite – you can use time more efficiently, but you can’t add extra hours into the day. If presented with a new opportunity you have to be honest about whether you can devote the time that the project deserves, or that you can undertake this task without neglecting your existing clients. ‘Scope creep’ is a frequent concern – does this work involve exactly what it says on the tin, is it likely to snowball into something larger, what is the true size of this undertaking and does my pricing cover any expansion? The ‘creep’ in ‘scope creep’ implies that this is a gradual process, which is true, but it pays to keep alert for early warning signs. An expanding project may not just grow to demand time you do not have, but may start to require skills outside of your area of expertise, leading to the same problems mentioned above. If this situation is considered beforehand and planned for then all should be well, but if the signs are missed you can end up out of your depth, struggling for time and not able to put in the kind of performance you would be proud of.

Being proud of what you do leads to thinking about ethics. Most people don’t want to end up working for or promoting something they don’t believe in. Yes, where you set your own standard with regard to ethics is entirely up to you but you need to be consistent. Some people can work in the arms industry quite contentedly as they have never themselves pulled a trigger, whilst others have resigned from payday loan companies which, despite the legality of their service, troubled those individuals on ethical and moral grounds. You might find it easy to turn down work for an international drug smuggling ring but be unsure about whether or not to provide consultancy to a company that delivers financial services to a major overseas client known to use underage labour in their factories. Where you plant your flag on a moral map is up to you, but it’s worth thinking about where that might be and important to consistently stand by your ethical code.

The business world is becoming increasingly transparent – a change exacerbated by social media. If you enter into a project with the wrong skill set, insufficient resources or if that endeavour ties you to a particular ethical standpoint, it will become public knowledge. This is why it is worth giving these matters thought beforehand. It is not unprofessional to turn down work. However, if you feel you must decline work, it must be done with grace. Through word-of-mouth communication, social media and traditional networking, your decision to say no will likely become known. Your communication strategies must be positive and forward looking, even when delivering a negative response. How you deliver the bad news requires care, integrity, careful deliberation and should not make you look like an amateur. Respect and honesty are the order of the day.

I was honest with myself when I came up with my four personal criteria. Time and skills factors aside, these are things that I want from my work. I have tried to keep things positive. Instead of a ‘blacklist’ of work I would not contemplate they are a checklist of things I look for in prospective work.

Turning down work may seem mad, bad or dangerous to do, but some decision making goes beyond looking at the potential dollar signs, and taking on the wrong project can seriously dent you professionally and leave you very unhappy personally. It’s important to do what’s right for you. Not everyone wants to be a monarch. There are opportunities for work out there that you can do well, earn money from, take pride in and enjoy without sitting on the throne of Albania.

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Professional courtesy – a dying art?

It never ceases to amaze me the lack of courtesy people display in the workplace. Recently there were two pieces of disappointing news I was entitled to hear but in both cases the other party, for reasons best known to themselves, chose to remain silent, with the result that I eventually found out in a far from satisfactory way. Firstly, this is poor business practice. Nobody likes to be the bearer of bad news for fear of the recipient choosing to shoot the messenger. However, communication is essential, even when the subject matter is negative.

You may have hear the saying ‘Good news is no news; no news is bad news; and bad news is good news’. Good news is no news because it means you’re meeting expectations, no news is bad news because it means being kept in the dark. But bad news can be good news because it means a problem is coming to light and you have the chance to fix it. The sooner this news is revealed the better. In general, people diagnosed with cancer at an early stage have much a better chance of beating it than those who discover the illness when it has developed and spread. In the corporate world, burying a problem or refusing to face facts can only have detrimental effects in the long term.

Secondly, it led me to think about the implications of politeness, manners and courtesy in the workplace on wider scale. With that in mind, I don’t intend to whinge and moan but to celebrate the application of courtesy and demonstrate how a little politeness can bring great benefits to your reputation, relationships and business.

Many seem to think we have developed beyond the need for courtesy. Archaic rituals and codes of behaviour seem increasingly pointless to us. Ancient proskynesis towards your host developed into kneeling, which was largely replaced by offering an open hand to be shaken. All of which were designed to impede one’s ability to draw a weapon or demonstrate an empty hand and thus no harmful intent towards the other party. This seems irrelevant today in an age when we no longer wear swords, but as a society we still sit up, take notice and comment when football managers refuse to shake hands after a game.

We can move on from certain social and cultural traditions, even to the point of making a deliberate statement by not conforming. But we shouldn’t abandon good manners. Companies wishing to project a specific image can relax their dress code or enforce a casual dress code, but it is definitely not common practice to maintain a deliberate policy of discourtesy (except perhaps for cold sales callers and spam emailers). Whatever the origins of our notions of politeness, the behaviors and attitudes that resulted still resonate with us. On an individual level, when you use manners and common courtesy, it shows consideration and professionalism. If you don’t then people make judgments about you regardless of your abilities. Applied to a business, courtesy demonstrates integrity, trustworthiness and inspires confidence.

In a culture of rudeness and disregard for courtesy it is easy to want to go with the flow. If nobody else bothers to switch off their mobile or set it to silent during a meeting, why should you? You can’t be singled out for criticism if it rings because everyone else there has had their phone go off in previous meetings. True, but you can be singled out as the person who always remembers and makes the effort to turn off their phone and concentrates fully on the matter at hand. You and your business can be singled out as being polite, respectful and pleasant to work with.

Every generation believes that we are in a state of moral and social decline. Modern commentators, medieval authors and ancient Roman poets have all written that standards of behavior and courtesy are not what they once were. It is possible that we are part of an ongoing decline. It is more likely that the ‘golden age’ every writer harks back to, when everyone behaved impeccably, never really existed and that we have always lived in a world where manners were there, were understood, but were not universally applied. Either way this is good news for those of us who do believe in courtesy – all the more reason to stand out from the crowd and not give in to impoliteness. In this world, an honest, polite, courteous individual or business draws attention. The darker the sky around them gets, the brighter the stars seem to shine.

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What do you want for yourself and your business?

Sometimes you need to think of yourself. Of the many motivators for setting up your own business, there are practical reasons and there are personal ones.

Pragmatic individuals starting up on their own need to remember that the world, the economy and the market may all change and your business may get tossed around in uncertainty. However, if you’re setting up on your own because it’s the idea of working for yourself and the lifestyle that goes with it that makes you happy – that happiness is likely to endure.

Last year the Office for National Statistics published a report showing that self-employment in the UK was higher than it has been in the last 40 years. The survey showed a dramatic rise in self-employment since 2009, a clear response to the financial crash of 2008.

This rise has not been overly due to more people making the leap, but to more people sticking at it. I mentioned more than once how tough life can be as a sole trader or start-up (especially in the early days) but with fewer employment opportunities out there, more people have been willing to stick it out.

With the situation changing and more jobs becoming available, this trend in rising self-employment may not necessarily continue. There aren’t many guarantees when it comes to setting up on your own. You might strike it rich, change the game or disrupt the market but you might not. If your motivations are money, power and influence you might be disappointed and, if the economic climate improves, we may see more such people drift back to employed work.

Things are different however if you’re looking for more of a life change. A survey was conducted by Microsoft on the benefits of working from home and Forbes published a list of the top ten:

  1. Work/home balance (60%)
  2. Save gas (55%)
  3. Avoid traffic (47%)
  4. More productive (45%)
  5. Less distractions (44%)
  6. Eliminate long commute (44%)
  7. Quieter atmosphere (43%)
  8. Less stressful environment (38%)
  9. More time with family (29%)
  10. Environmentally friendly (23%)

Many of the benefits listed here are more personal and have less to do with external factors. If you can see things that motivate you listed here then you have every reason to stay the course. Self-employed people are generally happier and the main reason for this comes in at number one in the list. Though we often work longer hours we have the control to choose when those hours are.

If a key motivator of yours is to increase your happiness and the results on this list are the sort of things that might just do that then these benefits are likely to hold true regardless of the turning wheel of fortune around you. The tough days can be endured because the real rewards are there for the taking.

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Positive Changes

Sometimes little changes can produce dramatic results. One little change I would recommend would be to start carrying a notebook. A key practical benefit of this is simply put by Will Self:

‘Always carry a notebook. And I mean always. The short-term memory only retains information for three minutes; unless it is committed to paper you can lose an idea forever’. 

Self is in good company, and it’s not just fellow creatives. Yes, Hemmingway, Picasso, Twain and Beethoven all carried notebooks, but so did men of science and business like Edison, Newton, Darwin and Rockefeller. Aristotle Onassis attached great importance to his:

‘Always carry a notebook. Write everything down. When you have an idea, write it down. When you meet someone new, write down everything you know about them. That way you will know how much time they are worth. When you hear something interesting, write it down. Writing it down will make you act upon it. If you don’t write it down you will forget it. THAT is a million dollar lesson they don’t teach you in business school!’ 

Though most of these individuals lived in a time without access to the same technology as us, the importance of carrying a notebook has not been diminished by the emergence of new tools, nor are the benefits of having a notebook to hand confined to aiding the memory. Self has access to phones and tablets, as does Richard Branson, who swears by his notebook.

We all carry smartphones and tablets which allow us to instantly update our diaries and contact details with important information. This is fine for data that can be easily compartmentalised. If you set a date for a meeting, you can record it in your calendar. If you get passed a business card you can add the details to your contacts.

Ideas can be woolly, sprawling and evolving and a blank page makes for an ideal repository. Listening to an effective presentation and noting down not the key information but the methods being employed and the effects on and responses from yourself and the audience involves summarising disparate pieces of information that are difficult to categorise.

An electronic blank page is not always an effective substitute because of the temptation to revise your notes. The editing capacity of software makes it invaluable in many situations but the beauty and utility of notebooks is that they record every idea – good and bad. Ideas don’t always materialise at the appropriate time and place. A terrible idea in the current moment may be a perfect solution to a future problem. When given the opportunity to save over or delete your notes, potential brilliance for times to come can be lost.

For this reason it is important to revisit your notebook regularly. Don’t judge your thoughts at the time, but consider them when you need inspiration. Personal notes and thoughts for the day also provide a starting point for much of my online content. Having a record of your experiences over the course of a week and noticing the key themes and patterns which emerge acts as a great preventative measure against writer’s block.

Some positive changes involve a significant shift in lifestyle or the purchasing of expensive new tools and equipment. Carrying a notebook and remembering to record key moments from your day is a change you can make where the potential benefits vastly outweigh the effort. It’s such a small change that, though you may not initially think it will work for you, there is no real reason not to give it a try for a few weeks. Be sure to note down how it works out.

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The Panama Papers: What Banks Need to Do

The recently leaked 11 million documents from the database of Panamanian law firm Mossack Fonseca shows the immense size of the problem the world is still facing in relation to money laundering and tax avoidance. Despite national and international efforts to prevent money laundering, the released information leaked from Mossack Fonseca shows that international companies and global leaders are involved in, or at least linked to, money laundering and tax avoidance.

Content of the Leaked Information

The 11 million leaked documents show that 72 former heads of state used the Panamanian law firm to assist in tax avoidance by setting up off-shore companies and schemes for the purpose of tax avoidance and even money laundering. According to reports, Mossack Fonseca also assisted its client in dodging international sanctions.

Whilst the leaked documents will leave many leaders red-faced, it more importantly shows that international financial institutions are still involved in the practice of setting up off-shore companies for their wealthy clients despite many banks having recently been fined for Anti-Money Laundering deficiencies. In fact, 500 banks, along with their subsidiaries and affiliates, created 15,600 shell companies with the help of Mossack Fonseca – 2,300 alone were created on behalf of HSBC and its clients.

What Mossack Fonseca Did

Whilst the setting up of an off-shore bank account and shell company is not necessarily illegal (so long as the rational for the account is above-board and its use is for legitimate purposes) it can be complicated for an individual to set up alone and so law firms are often commissioned to assist in the process.

Mossack Fonseca set up companies for its clients in countries with low or non-existent tax on financial transactions. These countries also have tight banking secrecy laws. Countries such as the British Virgin Islands (BVI), Bahamas and Cayman Islands, as well as Panama itself, have weak financial regulations and therefore, together with their attractive tax and banking secrecy legislation, these countries are often open to abuse from criminal activity.

  • Shell Companies

Mossack Fonseca setup shell companies for its clients. A shell company serves as a vehicle for business transactions without itself having any active business operations or significant assets. Shell companies can be used to hide assets and for money laundering and tax evasion purposes. Shell companies are set up as a normal company and have the initial appearance of being legitimate but are often nothing more than a registered post box.

Shell companies typically do not document or disclose the true activity or ownership of the company and are often controlled by law firms such as Mossack Fonseca who do little more than sign legal documents and approve financial transactions on behalf of the true beneficial owner.

Whilst most banks have a policy not to deal with shell banks, it is far more difficult to identify a shell company.

  • Recorded Benefical Ownership

Mossack Fonseca allegedly arranged for people, with no link to the underlying client, to be used and recorded as the beneficial owner of the company that was being setup. Whilst this is a breach of money laundering regulations it is not difficult to do with reports of cleaners working for law firms being recorded as owners of shell companies.

This process would enable the true Ultimate Beneficial Owner (UBO) of the company to remain anonymous. Even if the true UBO were a sanctioned person the company would probably still be accepted as a client by financial institutions as the registered UBO would not be well known and would not appear on any international sanctions lists. This would result in the true purpose and owner of the company slipping under the radar of even the most rigorous (Know Your Customer) KYC & Customer Due Diligence (CDD) checks.

The Panama Paper: How Banks Should React

The leak from Mossack Fonseca shows that huge numbers of illegitimate off-shore companies are being set up by financial institutions resulting in potentially criminal companies finding their way onto the client list of even the more discrete and compliant financial institutions.

Whilst the controls and process financial institutions need to adopt in order to protect themselves from money laundering and other criminal activity are well known, the Panama Leak highlights the way illegally acquired or laundered money is still finding its way into the global financial system.

There are a number of red flags that financial institutions should consider in order to protect from the illegal or at least “questionable” activity that firms such as Mossack Fonseca and their customers are involved in.

  • Shell Companies

Financial institutions need to ensure processes and controls are in place to identify shell companies. Whilst there is no easy way do to this, the location, address and any complex ownership structure of a company should be a “red flag” which would raise possible concerns. Financial institutions should also make a greater effort to identify law firms and other agents who establish shell companies for their clients and make sure their KYC staff are aware of the locations and addresses of such firms.

  • Off-Shore Financial Centres

Dealing with companies domiciled in off-shore financial locations is not in itself illegal, however, the fact that an entity is domiciled in an off-shore jurisdiction should raise the need to ask further questions and invoke the requirement to perform further due diligence on the company in question to ensure that the purpose and activity of the company, as well as the rational for an account to be opened, is legitimate and legal.

  • False Ownership

Financial institutions need to carry out enhanced due diligence on companies domiciled in off-shore financial centres to ensure the true beneficial owner has been identified. Like the identification of shell companies, identification of the true beneficial owner of a company is not a straight forward or prescriptive process.

A suitably trained and experience AML professional should have the knowledge to identify red flags relating to fraudulent ownership. Legitimate law firms could also be engaged to verify the information that has been provided with regards to the ownership of a company.

  • Bearer Shares

The identification of bearer shares within a corporate structure should raise alarm bells in regards to the legitimacy of the ownership of the company. Bearer shares provide total anonymity of ownership and transfer of assets without the need for any record of transfer.

Many financial institutions have a policy to not deal with companies that have a share structure that includes bearer shares, but the existence of bearer shares in a corporate structure is often difficult to identify.

  • Complex & Unusal Transactions

Mossack Fonseca allegedly assisted its clients to break international sanctions by structuring complex webs of transactions and deals in order to get assets from a sanctioned country, entity or person into the legitimate financial system.

Financial institutions should have a robust and effective transactions monitoring process which would identify any suspicious, complex and unusual transactions. Any such transactions could be part of a wider method to launder illegal money through the banking system and should be identified and escalated with further due diligence carried out when required.

The Panama Papers: What Next?

The impact of the Panama Papers will no doubt be long term. Transparency International has already called for an international register of UBOs for all companies. However, the likelihood of this happening in the foreseeable future is slim as too many governments are opposed or dragging their feet.

In the UK the public register of beneficial interest comes into force on the 6th of April, resulting in all UK registered companies having to confirm ownership on all annual returns complete from the 30th of June 2016. Whilst this is a step forward, and applied internationally could protect the activities carried out by firms such as Mossack Fonseca, the UK government will not verify the information contained in the return leaving the register open to abuse. In addition the implementation in several UK off-shore centres is delayed or being disputed by the off-shore government.

Equally, as the information being recorded on the UK public register of beneficial interest is not being verified, financial institutions are should not place sole reliance on this information and should additionally carry out their own due diligence.


Off-shore tax havens and shell companies have been used for years to launder money. The content of the documents leaked from Mossack Fonseca shows not only the scale of the problem, but how international leaders use these methods to transfer and manage their assets. That said, analysis of the 11m leaked documents has already led to a number of firms and transaction routes being identified that will help law enforcement agencies and the financial system to more effectively investigate suspicions over firms with a Panama link. Financial institutions should ensure that they gain maximum leverage from this information.

Protecting the global financial system from abuse is not going to happen overnight but investing in robust and efficient processes and controls to identify suspicious activity should be at the forefront of the industry’s war on money laundering.

FATF Recommendation 40 states “Financial institutions should refuse to enter into, or continue, a correspondent banking relationship with shell banks”.

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Riding The Waves

Bad news travels in packs. On the bright side, so does good news. It certainly feels that way. In many cases we have no control over external events and have to learn to surf the waves. However, there are situations where we make our own news and, to an extent, understanding why bad news seems to pile up helps us with our surfing.

Certain varieties of bad news, such as Illness and injury, really are beyond our control. However, if other bad news seems to arrive in groups it can be because you are subconsciously encouraging it. There are cycles of perception and an individual weighed down by bad news can act as a magnet for more.

In his book Thinking, Fast and Slow, Daniel Kahneman references an experiment carried out on individuals using a New York phone booth (back in the days when people still used phone booths). For half of the unwitting subjects, money for a call had been deliberately left in the phone by the organisers. When the subjects had finished their call and exited the booth, a passer-by ‘accidently’ dropped a sheaf of papers on the ground. Of those who had just benefitted from a free call, 88% stopped to help with the ‘accident’ they witnessed. Of those who had paid for their own call, only 4% stopped to pick up papers.

A stroke of seeming good luck makes most of us more positive and more likely to act in a positive way. Translate this to the commercial world where one good turn really does earn another and what goes around does tend to come around, and you can see how a positive cycle can develop. A piece of good news can cause you to act in a way that is likely to earn you more good news.

You can also imagine the reverse. A dose of bad news can put you off your stride, take you out of the right frame of mind and lead you to make poor choices. Imagine attending a meeting with a prospective client. If you’ve recently secured lucrative work with another client, your mood will be significantly different than if you’ve recently received some bad news about a working partnership gone sour. Which version of you would be more likely to seal this deal?

You might think that you are above such influences, but the phone box experiment demonstrates that good or bad news affects our disposition without us necessarily realising, even though it’s something others may well pick up on. You only have to look at the economy. Beneath all the formulas and predictive equations, the stock market is ultimately built on confidence and is subject to cycles of boom and bust that are more to do with psychology than facts and figures.

You can’t avoid hearing bad news from time to time, but you can try to ride the waves. Working on your emotional intelligence and self-awareness can help you compartmentalise bad news, accept it and try to minimise its perceptible effects. We’re not robots and we can’t control our subconscious but we can take steps to minimise the effect bad news has on us in the future and at the very least, realise that these cycles do end. Good news does come, and when you get that free New York phone call it is important to take full advantage of the psychological benefits good news can bring.

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Be passionate – but be more than just passionate

How passionate are you about your idea, and can you make it contagious without going over the top?

Floating about in the vacuum of space, Tim Peake is probably very aware of the importance of oxygen. We need oxygen to live. It also improves life – extra oxygen is administered to treat chronic conditions, as emergency first aid and as a health therapy. However, pure oxygen can be just as lethal as none.

Anything positive can become negative in excess. Passion is no exception. Not being at all passionate about your idea is an unusual situation. I suppose you could be completely dispassionate about a statistically overwhelming money making venture, but when you’re setting up your own business it’s often tied to your emotions.

Most people have a degree of passion about their idea. Which is good – you need passion. Passion for an idea can lift it from being mediocre to viable. Passion can raise a good entrepreneur to levels of greatness.  If your idea doesn’t excite you at all, you might want to rethink your idea because it really should.

Feeling passionate about your idea motivates you to take risks, to burn the midnight oil and go the extra mile.  Real passion is contagious too. Put yourself in the shoes of a potential client or investor.  If you’re faced with two companies offering a similar service for similar cost but one of them is genuinely excited about the project, they stand out.

As with oxygen, you need passion to survive, it can improve your life but a pure dosage can be deadly. Emotional investment can slip over into emotional over-investment, delusion, and egotism. Nor is passion a substitute for aptitude, competence or a good idea. To ensure that an overabundance of passion isn’t blinding you to reality – make sure you keep in constant touch with reality!

Don’t operate in a vacuum. Seek counsel often. Speak to trusted advisors, friends, a mentor, or all of the above. Encourage people to challenge your thinking. Constant reality checks ensure that your passion remains healthy – lighting the path forward, not clouding out inconvenient truths.

Passion is not a decoration, a luxury, or an optional extra. It’s a key element. You need to be passionate about what you do, to motivate yourself and to inspire others. It’s also just one element. Whether you’re baking a cake or building a space station, you won’t get far with just one ingredient or component. Be passionate; but make sure you’re more than just passionate.

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Dangerous Assumptions and the Power of Discernment

Assumptions can be dangerous. We’re all aware that making assumptions can lead to trouble, but we tend to focus on avoiding them on a grand scale and occasionally lack vigilance when it comes to detail. We might not assume that a new contact will become a profitable client, but we might assume they received the email we sent.

That’s not to say that bad assumptions don’t occur on a big stage. When Disney were building the hotels and services for their Paris location they assumed that visitors to the park would want to stay for the same length of time they did in their other locations. The fact that the park was one third of the size of the others led to many empty hotel rooms.

This is an extreme example, but day-to-day assumptions can prove costly too. We have previously looked at the importance of being liked and how a positive relationship with a client or partner can lead to trust, which is an essential business component. However, this is a process. Confusing being liked with being trusted and assuming that trust exists too early can lead to trouble.

Even if you do develop a trusting working relationship with someone, it is important to be realistic about what this really means. An assumption is a belief held without evidence to support it. If you believe this new relationship could lead to a sale, do you have the evidence that this individual has the influence within their organisation to make that happen?

Even at the conclusion of work, people’s assumptions can cost them. We know how powerful word of mouth recommendations are. If you’ve just completed some work for a happy client who has been thoroughly impressed you might assume they will recommend you to others. You know they are well connected, have many useful contacts and numerous twitter followers, so you assume that several opportunities may spring from this.

It might happen, but there’s no evidenced for this belief. The simple act of asking the satisfied customer if they would mention you can turn the first assumption into truth. The second remains an assumption not a guarantee.

Above all, never assume anything is as simple as it seems. That’s not to say that everyone you encounter will have some ulterior motive, but when you’re dealing with real people you need to be sure you fully understand the situation and remember that there is a good reason for every question, even if it is not obvious.

To return to Disney, the famous, most frequently asked question at their customer service desks is ‘what time is the three o’clock parade?’. A seemingly simple (to the point of stupid) question – you assume you know the answer. However, staff have learnt that the question really being asked is ‘given that the parade draws large crowds, how long before the start of the parade do I need to find a viewing space so that my children can see it?’

Don’t assume you know what question is being asked. Always look a little deeper and always look for the evidence that turns your assumptions into truths.

Posted in: Life Skills

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