Trade Skills - The missing skill?

And some links worth clicking on

Hi,

I hope you are doing safe and well. It's busy at Lambert Towers. We're closing in on starting our house renovation, so plenty of planning, financial planning, design planning, more planning and more planning.

I've also launched the new audio series called "Here's an idea worth playing with" (HAIWPW) - hope you all received that. Eventually HAIWPW will be part of the paid masterclass but let's see how we get on. Feedback so far was very positive indeed - thank you!

Is your ladder leaning against the right wall?

The Apprentice

I'm a big fan of the TV show The Apprentice with Lord Alan Sugar. I watch it with my two eldest kids and, as you may imagine, I'm very vocal throughout.

The candidates rile me up with their ineptitude and lack of common sense, but more frustrating for me, is their backstabbing and all-out mischievousness towards other people. It's entertaining and sadly sometimes very reflective of some work places. It’s enjoyable to watch though.

That aside, the reason I mention The Apprentice, is because of Lord Alan Sugar.

He's an old school business man and he asserts that in almost every episode. He scolds people for lacking business basics; pricing too low, not using common sense and not understanding the basic numbers in business. (Note: I’m not holding him up as a high bar of management behaviours - at least not from his caricature on the show)

I see the same thing in my experience of work also. Talented, skilled, competent people who lack basic business skills, or “commercial awareness” as I call it.

I look for three main behaviours when I recruit and build teams;

1. communication (no surprise there)

2. ability to do the job

3. commercial awareness

With good communication skills people can build relationships, exude presence, listen, deal with conflict, convey ideas clearly and work with people who may be very different to them.

With a good ability to do the work itself, we’re sure that someone can hit the ground running. Note here though - I don’t look for experts - I look for people who are competent and keen learners (more on that in a minute, as that’s a commercial awareness behaviour!)

With commercial awareness new hires can understand how to help the business stay alive and keep delivering value to customers - i.e. add value, make money, reduce costs and keep delighting customers.

You know I like dictionary definitions, and I like the Cambridge online version:

Commercial :

— related to making money by buying and selling things:

Awareness :

— knowledge that something exists, or understanding of a situation or subject at the present time based on information or experience:

So, commercial awareness is essentially experience or knowledge (knowledge is information in action) of how a business makes money (and incurs costs).

But commercial awareness, at least for me, is a collective term for a group of core behaviours - and these behaviours are what Paul Hawken (Hawken, 1988) calls “Trade Skills”.

These "trade skills" are:

• Persistence

• Ability to face facts

• Ability to minimise risk

• Ability to be a hands-on learner

• Ability to grasp numbers

Each one of these behaviours/skills is essential to build commercial awareness and allows employees to understand and contribute to better business results and positive workplaces. And this helps to keep the business alive.

Yet everyday I encounter a great deal of people who lack some of these basic behaviours which means decisions, work, energy, attention, action and everything else is often directed to things that sound plausible (but aren’t), are interesting, make people’s lives easier (but make the business worse) or are busy activities that add little business value at all.

To understand where to intervene in a system, what work should take priority or where optimisations should happen, it’s important to understand what generates money or costs money, how and why. Only then can we understand which of the many levers we can pull.

To make meaningful and impactful change in a business, it’s important to know how the business makes money and where costs rack up. Commercial awareness is essential then to ensure the work we do is helping to keep the business alive and create a better workplace.

Persistence

This is not about dog-headed, hard-nosed, destroy everything in your path persistence. This is gentle. It is slow and steady persistence towards better business results and improved workplaces.

Calm, focused, steady action towards being better everyday and moving the business towards better value for customers and a better place to work.

Tiny little steps add up. Change is always happening, so a gentle nudging everyday towards the bright future is key. Massive overnight change plans, or demanding a different culture, rarely work. Turmoil ensues, energy is sapped and confusion sets in.

Persistently overcoming obstacles and making the flow of value better is much more effective. Everyday persistence helps to make a better workplace too.

Ability to face facts

Ignoring the current reality is a path for failure. As we’ll cover in the paid version of this newsletter (about releasing agility), it’s absolutely crucial to face our current reality.

It’s hard to do, especially for leaders and managers, as they have likely created the current reality in the first place - and it may be tear inducing.

But the path to better results and cultivated workplaces requires an honest assessment (with evidence and data) of where you are now. Face the facts of today so you can persistently move to something better.

I like people to be honest, brutally so sometimes, about our current reality, because only then can we make sure footed next steps towards our goals.

As the saying goes, if you don’t know where you are, how will you know how to get to your destination? This is an essential behaviour I look for in people - are they adept at understanding and leaning into the current reality.

Ability to minimise risk

The business world is infected by Facebook. “Move fast and break things”. I see this mantra rippling through businesses of all sorts. “Fail Fast” is the cry of executives wanting faster and better results.

But many failures can be avoided by slowing down and thinking things through. We can learn from others who have failed before us. We can listen and take inputs from those doing the work about potential pitfalls, or ways to minimise risks. We can set up new experiments, innovation tests and creative ideas with suitable constraints and guardrails to protect people and the business.

We can coach, teach and study to understand what may happen if we embark on something.

Yet people rush in and aim to fail fast, misguided in the belief that we only learn from failing. We do indeed learn from failures (if we choose to), but we also learn from our successes and other people who have failed and sharing what they know. Not all failures have the same impact too. Some can be catastrophic for yourself and/or the business.

I look at this differently.

My goal is not to fail at all, yet holding in my head the counter view - that everything new and creative has a chance of failure.

What can we do to minimise those risks? What can we do to protect what is working? How can we spend a little money to try something - using a scientific method of discovery, rather than throwing all of our budget at something that may not work?

Sometimes, simply sitting down and thinking about the problem and solution can throw up potential failures or risks. Guardrails, measures and feedback all help.

The more you know about the system, the wider your awareness is of your work - the more you can think things through critically. You then have more chance of seeing and mitigating or minimising your risks. Failure will happen, but let’s not bring it on unneccessarily when a little critical thinking could help us.

Ability to be a hands-on learner

I’ve done posts and videos on my two learning styles for my own life, and in work.

Information acquisition is about learning from books, videos, newsletters, education establishments, learning management systems etc. There is great value and merit in this.

But to turn this into knowledge requires Task Acquisition; the act of learning by doing the work. The twoo together are powerful.

Knowledge is information in action.

This is a key trade-skill and a pathway to commercial awareness. I meet plenty of consultants consulting on leadership, but they’ve never lead a team. Or consulting on financial models but have never held a P&L. Or consulting on management but have never managed.

You learn more about leadership by being a leader than you ever could from a book. Management is not easy - and the best way to learn is to manage people and experience the drama (and growth) that will come to your life.

The best way to learn how work actually works, is to do the work itself.

Everything I share with you on my channels comes from experience. I have been a leader in tech and HR, and a manager, and a product owner, and head of agile, and a communication trainer. What I teach and share comes from being a hands-on-learner, not merely information I have acquired and am passing on.

I guess the point is that the best way to learn about your business is to get into the work itself and understand it. Shadow people, do the work, learn the systems, experience the pain with those people in the system. And then, when you understand the work, you can help to make it better.

Lord Sugar is the master of this in the apprentice. Starting out as a market trader he’s been there first hand; speaking with customers, dealing with stock, buying from suppliers, trying to turn a profit, dealing with competitive forces. And he’s looking for that in the people he invests in.

One of the best things I ever did as a teenager (and I did a lot of stuff I’m not so proud of) is work in pretty much every role in a supermarket. That’s where I learned a lot of these trade skills. We should never discount any experience we had in past, especially in retail, these are often trade skills in action that are directly transferable to almost any other type of business.

Ability to grasp numbers

Knowing how numbers in a business work is a core skill I look for. You don’t need to become a financial controller, or plumb the depths of business finances, but understanding high level business finances is essential to develop trade skills.

Almost every number used in business is a ratio. Profit versus loss. Customer acquisition costs versus lifetime value of a customer. Recruitment costs versus retention rates, or business value per employee. There are LOADS of ways of comparing numbers in a business to understand what’s happening. We’ll cover plenty in the Releasing Agility paid masterclass in due course.

Understanding, at a basic level, the profit and loss statement in your department or company would be a great start. What makes money? What incurs costs? How is money made? How is money spent?

Employee costs are typically the highest cost in a business, so I’m always amazed when leaders and managers ask for more people - to the point where teams are bloated and people end up scrabbling around for work. It’s also a highly ineffective lever in business - to ask for more. There comes a point when more people are needed but believe me, there’s a lot of work to remove from the system way before that point usually.

The lifetime value of a customer is important - when looked at across the business (as in, not in any single department), you can see where costs pop up.

For example, it’s common for leaders to look at ways to reduce the costs of building a product. “Let’s cut costs in development”. Great, it’s now cheaper (from a staff cost perspective) to make the product - maybe through an outsource model or hiring juniors to do the work.

But then the product created is not fit-for-purpose and costs rise in Operations or Support as people deal with angry customers who are churning. Sales get back involved to save the customer and maybe throw in some upgrades or free license costs. Soon you’re spending WAY more to keep the customers, than you would have by looking at overall costs and not cutting costs in development.

You only see this by looking across departments at the lifetime value versus costs. If you look at merely costs per department in isolation, you’ll end up trying to reduce costs and not know what is causing costs somewhere else.

I worked in one company that were actively developing a platform that only one customer used. It cost 10x more to maintain and build the platform than they were generating in revenue. Knowing numbers helps you find these areas for growth and/or improvement.

These are the behaviours I look for when looking at commercial awareness.

Conclusion

I should like to point out that I’m not holding Lord Sugar up as a role model for good management. His TV style is not one I resonate with, but commercial awareness lessons abound in the TV show. When I recruit I’m looking for people who have commercial awareness and the best way to interview for this is to ask behavioural based questions around the trade skills listed above.

Be persistent, face facts, minimise risks, learn through doing and understand numbers. Not only are these great behaviours and skills for the company you work for but they are transferable skills to any single business. They are career skills. And they will also help if you ever want to set up your own business or venture.

Some links worth clicking on

1. The campaign to protect women experiencing menopause by making it a protected characteristic has been rejected by UK ministers. It’s a set back made worse by the lack of engagement by the UK Government with those advocating for better awareness.

2. The personal brand paradox. I have a post lined up about personal branding too. At work it can, and does, lead to individuals not playing nicely with other “personal brands”. Good article on a different angle - that human’s are messy.

3. Apparently, Jan and Feb are the top months for hiring. Some ideas here on how to stand out in the crowd if you’re looking for a job.

4. Our products are getting worse… very interesting read on how corners are being cut and the products we buy are getting worse.

5. Stephen King’s got 20 rules for writers. Enjoyed this a lot.

Until next time

Rob..

Reference list

Hawken, P. (1988). Growing a business. New York: Simon And Schuster.