In the second of 4 episodes tracing the development of the multi-award winning Legal Island, its founder and chairman Barry Phillips talks about a key mistake he made in developing the business, decision taking in business, networking, how to develop as a business leader and entering partnerships.

Introduced by MD Jayne Gallagher, this series of episodes (to be released over the next 6 months to mark Legal Island’s 21st anniversary) is a must for all those with an interest in business start-ups and development, managing people and leading a company.

Transcript

Hello Everyone,

Its Jayne Gallagher here again to introduce part 2 of the Legal Island story to you.

You’ll recall in Part 1 published in January this year Barry traced the early development of the company outlining some of the challenges that we faced but that also made us who we are today.

So here we go sit back enjoy the Legal Island story Part II.

Thank you Jayne and hello to everyone. Before I get stuck in to the second part of the Legal-Island journey I just wanted to say that if you have any comments on what you hear today please get in touch. I’d love to hear from you on barry@legal-island.com

I’m always startled by the reach of these podcasts. Part 1 attracted listeners from all over the world including Malawai, Brazil and New Zealand. And if you are one of the regular listeners Kangasala, Finland or in San Jose California thank you for listening too. I’m intrigued.

In part 3 of the Legal-Island story I want to talk about the talent and people side of the business but for today I’d like to cover five key areas of the business in terms of its development. For anyone who missed Part 1 of the Legal Island story in brief our trading history goes like this. We started 21 years ago. We now operate in 3 countries, have won best place to work in Ireland on many occasions and have a turnover close to £2million pounds. We work mainly helping organisation comply with employment law but we do other things too.

The five key areas I’d like to talk about include:

• A key mistake I made developing my business
• Decision taking in business
• Networking
• How to develop as a business leader
• Entering partnerships

A key mistake

But I’d like to start with a key mistake I made developing my business and it’s to do with remaining immersed in my business far too deeply and for far too long.

Earlier this year I interviewed entrepreneur Mary McKenna. I’m a great fan of her work and rate her highly as a business leader and investor. However, she and I disagree on one key item. She believes you have to go all in when starting a business and I’m not sure that you do. When I interviewed her for my podcast at the Titanic Hotel earlier last year she was pretty firm in her view that you have to go all in and sacrifice everything else.
 

I remember doing just this for at least the first five years of Legal Island. When we eventually went to a bricks and mortar office there were very few days in which I didn’t leave my desk before 10p.m. having started at 7 that morning. I was in most weekends at least one day and often two days. To this day I have vivid memories of exiting the office with little energy left dragging my feet across the car park to my car like some zombie with no other care in the world other than total commitment to one thing: the company, my company.

But when I look back at this now I wonder whether much of this behaviour was really down to my needing a comfort blanket in the event it all went pear shaped. I wanted the security of saying to myself if this business goes belly up it’s not going to be because I didn’t work hard enough and threw everything I had at it. But when all you have in your tool shed is more hours I realise now there’s something badly wrong. It’s more craft you need usually, not graft.

I think entrepreneurs should as a base position aim to out think and not to out work their opposition. From day one they should ask how can I do what I plan to do more cleverly than anyone else? The opportunities to do this are unbounded. I need to take better quality decisions than they do, I need to resource and leverage better. Do these things and I’ll steal a huge march on my competitors and I’ll enjoy lots more down time than them too.

Sure there were times in which we were punching well above our weight and having to meet impossible deadlines. We’d meet customers and they’d ask whether we had 20 or 30 staff and were shocked when they learned we had just five. But I’m sure that if I had given myself more finite working hours I could have achieved much the same results and perhaps even better ones because I would have been working more intelligently.

In the seminal work the E-myth Michael E Gerber talks about the importance of working on the business and not in it. Build a company based on systems not one individual he argues. Build your first business as though you plan to franchise it and document every process. Examples he quotes include MacDonald’s probably the most successful franchising business in history. What I failed to do was lift myself out of the business early enough and Legal-Island only really began to grow as soon as I managed to do this.

Decision taking

The second area I’d like to cover today is about decision taking in business. Let me explain as follows.

I’m not from an entrepreneurial family. In fact there are no entrepreneurs in my immediate family at all although I’ve always felt my only sibling, Wendy would make a good one if she gave it a go. None of my close friends are entrepreneurs. They work in the public sector or for banks or charities. Whilst I trust their advice there are times in which you do need to speak to other entrepreneurs to bounce off ideas or to get them to test your strategizing.

As Legal-Island began to get legs I set up a senior team in the hope they would assist me with high level thinking. Whilst colleagues are important to consult on some issues I soon learnt this wasn’t the mechanism I needed to really draw out my big thinking. Often you can’t talk openly to colleagues about big plans because they may realise that the direction you have in mind may not include them or at least not be good for them. There’s also safety to speak issues. However approachable and amiable you are as a leader it’s unrealistic for you to expect them to really go at you when they think you’ve got something badly wrong. Also, any developing business necessarily needs a lot of administrators, implementor finishers these people are vital to a business but they’re not the sort that are best placed to help you with the big picture stuff nor are the likely to encourage you to take the risk that you need to move a business to the next level.

Eventually, I decided to bite the bullet and set up a mechanism that was external to the business. I decided to appoint an advisory board. This proved to have the following benefits:

1. I could cheery pick the people I felt had the experience I needed to help me take the important business decisions.
2. I could select those I felt would have the courage to challenge me and tell me plainly when they thought I was wrong
3. I could select people from backgrounds that would really enrich the decision taking process. This I did. Our current board consists of two entrepreneurs, a process person and a business consultant.

Usually the Legal-Island Advisory Board meets 3-4 times a year for 3 hours each meeting. It helps with whatever we feel is needed including strategy development, governance issues, contingency planning and more recently Brexit readiness. I think many more companies in Northern Ireland could benefit from similar mechanisms. My guess is that a good number of SMEs don’t go for advisory boards because they don’t understand how they operate and how to go about setting them up.

But I soon learnt that taking business decisions is not only about having good people around you to consult. It’s also about positioning yourself such that you give yourself the best chance of taking the best decision possible at that time.

Abraham Lincoln used to say that he aspired to be able to take decisions devoid of all pride, ego, bitterness, negativity. In the fabulous book Team of Rivals by Doris Kearns Goodwin the author describes how Lincoln appointed his Cabinet purely on the basis of their fitness for the role. His own view of each and any rivalry or history shared between them and him appeared to play no part in the decision making process in terms of who was appointed and who was not.

Einstein once said if I had one hour to resolve a challenge I’d spend 55 minutes making sure I had the right questions out and the last five minutes working on the answer. Now before taking a big decision I tend to ask myself a number of questions beforehand. Questions I often ask myself include the following:

1. Am I taking this decision in this way simply to be consistent with an earlier decision? Is now the right time to actually admit that that first decision was wrong? There’s no harm in doing this sometimes. I actually think it’s good leadership
2. Am I taking this decision too early  and playing off a hunch that actually requires more research and evidence
3. Am I actually avoiding taking a decision here because I feel I don’t have enough evidence in front of me? To a point this is in slight contradiction to 2 above. It is important however to remember that we never operate with perfect information and knowledge and at various points you do have to work off hunches and gut feeling. Sometimes refusing to take a decision because you’re confronted with too many unknowns can be fatal. In the excellent book and film “Touching the Void” two climbers get in trouble whilst coming down from a snow capped mountain in South America. One falls down a crevasse and breaks a leg. He’s too weak to climb back up and he doesn’t know what is further down inside the crevasse. But what he does know is that a decision to do nothing and wait there will kill him. He lowers himself deep into the crevasse knowing full well he can’t climb back out. Eventually he sees a chink of light to one side heads towards it and crawls out and back to base camp and saves his life.
4. Finally, is my head in the right place to take this decision right now?  Am I feeling anger, frustration, fatigue or any other negative emotion that might skew this decision in the wrong direction?

Incidentally an invaluable tool in this space I’ve found is meditation. I meditate for at least ten minutes every day. It’s amazing how many people rely on their brains as a principle means of making a living and yet do so little work on their brains themselves. Earlier last year I went on a ten day silent meditation retreat in Drogheda to really develop this practice. I now run workshops for leaders in NI with a friend on how to meditate. We do this 3 or 4 times a year. But there are apps around now that can help you. Headspace is a good one and Waking Up by Sam Harris is another.

How you review your decision taking is another huge topic best left for another podcast episode.  But for now it’s worth noting that there are huge challenges to reviewing objectively which decisions were good ones and which were not. Confirmation bias is one such challenge. People are very good at going looking for evidence to support an existing view of something rather than seeking out the truth to lay down on a blank whiteboard. Partly related to this is a business leader’s inability to really analyse what was wrong about a decision. The pace of business life is so fast that we rarely slow down enough to examine what exactly happened. Instead, overtime business fables tend to show themselves. A project is known to have failed for one main reason which repeated enough or left without challenged becomes the main explanation. The reality is that business ventures fail for many reasons and it’s rarely because of one reason a recession or an overpriced product or a poor distribution channel for example.

So many business books talk about the value of failure. Many podcast hosts ask interviewees about their favourite failure that actually propelled them later to great success but I wonder if our obsession with failure is unhealthy and that failure is overrated because we simply don’t understand what really caused it in the first place. A while ago we organised a number of events in GB. They didn’t prove to be a great success. There was a team of about five people involved. Ask any one of them today why we weren’t more successful and it’s my guess you’ll get five different answers.

Networking

The third area I want to cover is about networking and in particular networking in Northern Ireland.

It was Jim Rohn who said you become the average of the five people you spend most of your time with. I think about this a lot and wish I had been far more strategic in targeting and spending time with people relevant to my business world and development. I should have actively gone after people who were much further ahead of me in terms of their business journey and I should have read a lot more too from those who had clearly succeeded and were sharing with others what they had spent a lot of time working out or finding out for themselves. When Jim Rohn first came with the quote he likely meant surround yourself physically with five important go getters by joining the right social club, attending the right business meetings, the right leadership events. Today, you can do it in an altogether different way. You can follow big hitters on Twitter, listen to their podcasts, have one on one coaching sessions through Skype over the Internet. In short, it’s a lot easier to do it than it was before and there’s no excuse not to.

Networking in Northern Ireland is different to anywhere else in the UK or Ireland. It’s such a small pond that it is very easy to get to whoever it is you want to get in front of. If you don’t know them personally you’re likely to know someone who does who could refer you in. With the advent of social media too it’s possible to reach out to people in a way that just ten years ago was unimaginable.

Northern Ireland is rammed full of networking events breakfast, lunches black tie dinner. Over the years my attitude to networking has changed or maybe my needs have just changed. Either way, I approach it very differently compared to before. In days gone by I’d accept invitations to different events with no networking strategy in mind. I guess it was a classic case of FOMO. I was there for the fear of missing out by not being there. Now I’ve changed this to JOMO: the joy of missing out. When something is on that I might otherwise have been at I think of the quality time I’m having with family or reading a really good biography when I could have been standing like a penguin hiding behind a glass of red wine listening to someone moan about Brexit.

I’m not sure how much I get out of networking via the medium of social media too – or maybe here too my needs are just changing. Certainly in the early days of social media applications like Twitter offered the opportunity for you to follow those you really rated to see what they were doing and to learn from them. LinkedIn appeared a great way to contact others with expertise you needed to access. Today, the majority of social media posts seem to be all about peacocking self-promotion with people declaring how delighted they are to be attending a particular event. We’ll John Brown I’m delighted you’re delighted but where does this delight get us all? I’d feel better if I didn’t see the vertical pronoun “I” so often in LinkedIn posts. And as for Facebook posts there’s so much social peacocking going on that it’s almost unbearable to use now and please don’t get me started on those who use it to have conversations with family members that they should really be keeping for the family home. On Valentine’s Day if you love her tell her face to face! Or am I missing something here?

What’s clear to me is that the very large majority of the real movers and shakers in NI aren’t on social media at all. They are far too busy doing stuff to worry about representing themselves online to others online – these others seem to be watching because they’ve nothing much else to do or because they’re seeking some sort of validation by engaging with others conversing about noting of any real value and importance.

I still do attend the occasionally networking event. If truth be told with me I never know who is going to turn up. Sometimes it’s the cynical Barry Phillips who immediately questions what he’s doing there. Sometimes I go all shy for some reason and end up standing like Johnny Nofriends on his own. Most of the time however I guess I make an effort to maximise the time I’ve allocated to the exercise. Very occasionally I really work a room and make loads of useful introductions. Over the years I’ve learned a few tips in terms of how to network well. First and most importantly talk away from home. Put the spot light on the person you’re meeting and try to work out a way to help them. Helping others is the best way to network. Do a good turn for someone and it’ll come back to you sometime in the future and hey if it never does isn’t it nice just doing good things for people anyway?

Secondly, take a genuine interest in the person you’re meeting and talking to it. Tony Robbins will say that if you’re bored talking to someone it’s your fault. I’m not sure if I totally agree with him but in any ten minute encounter with a complete stranger a good networker should be able to find a person’s sweet spot and get them to share and to talk about what really matters to them. Third go armed with ready to use openers. A poor uphill start is difficult to recover from but a strong opening helps tremendously. I use “What’s your interest in coming here?” or “What’s are your biggest challenges in business at the moment?” These are two very open questions that allow people to speak about whatever is most important to them at the time.

How to develop as a business leader

Next I’d like to talk about the resources I use to develop as a business leader. I’m often asked this and I hope the next section in particular you’ll find useful.

I truly believe we’re in the golden age of audio now and I use audio a lot for my professional development. I listen a great deal to podcasts whilst cycling to and from work, whilst shopping or doing other mundane activities. One of the most underrated podcasts on leadership for me is actually Desert Island Disks. Kirsty Young is on leave from the show at the moment on health grounds and may she hurry back soon. She’s interviewed huge numbers of leaders and successful people across many disciplines and her questioning is both insightful and revealing. If the show was called something like Leaders and what makes them successful it would get a much different following and far more business people would tune in.

Another favourite podcast of mine is The Tim Ferriss show. This is first rate for two reasons. First the quality of people he gets on the show. It seems no-one is beyond his reach. Secondly, the quality of his questions. He really does seem able to ask the questions that you want asked. Many reveal the complexity of business decision taking.

Ferris of course is known too for his books and his seminal work The Four Hour Work Week. His more recent works “Tools of Titans” and “Tribe of Mentors” are essential reading for anyone wanting to find out why certain leaders across many disciplines succeed.

I’ve already mentioned the E-Myth and just how important that book was for me. Two others that really made an impact were written by chess champions. Now don’t get me wrong my chess ability is limited to a knowledge of how each piece moves. If I showed you how to castle you’d probably tell me it was wrong. But the books for me take the learning from the game and illustrate well how you can apply it to life in general but also and more specifically the business world. The first book is How Life Imitates Chess by Gary Kasporov.

I actually met Kasprov in London a number of years ago. He had the most penetrating eyes and stare I think I’ve ever seen and he must have scared the bejesus out of many opponents across the chess board. Kasporov spends a lot of time talking about understanding the difference between tactics and strategy. He was so difficult to beat because he could change both at will. Tactics he explained was deciding whether to lead with your pawns or some of your second row pieces. Strategy on the otherhand was deciding whether to play aggressively or defensively or by switching them around featuring a game of two halves. He beat some of the greatest players in the history of the game by taking to the board the type of strategy he knew they’d struggle with most.

The second chess book that is definitely worth a read is Josh Waitzkins “The Art of Learning”. As well as a world chess champion he was also a world champion martial arts expert in what is called Tai Chi or sometimes Push Hands. The book is about how he went after excellence and achieved it in both disciplines. He makes very well the connection between the two sports arguing that both rely heavily on drawing your opponent into making mistakes and hopefully fatal errors.

His book offers a huge amount in terms of how to be in the moment in whatever it is you are doing and how to set yourself up for optimum performance in whatever it is you do. There’s a fabulous video on YouTube of his fight for a world title in Taiwan which was obviously rigged in favour of his local opponent. It shows him clearly keeping his focus to beat his adversary when everyone around him was falling apart complaining about the judging of the fight.

But what he has to say about helping children to learn is really insightful. He argues with some force that you should aim to praise effort not success. As soon as you convince a child that he or she is naturally gifted at something they are likely to quit the moment they experience failure. The drop is far too high. Help them understand that there is a learning process they can engage which will take them to excellence and this is the biggest gift you can give to children and their education.

As I record this on the desk in front of me is a pile of books that have been recommended to me by people whose recommendations I really trust and value. Some of these may be going with me on my next holiday when I tend to binge read best I can. The books include High Output Management by Andrew Grove that has been recommended to me by a number of people. “The Art of Thinking Clearly” by Rolf Dobelli. “Surely you’re joking Mr Feynman” by Richard Feynman which is about creativity in business and The Box by Marc Levinson. This is if you like a biography about the shipping container and how it made the world smaller and the world economy bigger.

Partnerships

The fifth and final business area I want to talk about is partnerships.

Partnering up when you’re an SME particularly a micro company is a great way to punch above your weight and to grow organically and quickly. Sometimes you can identify a market need but you can’t satisfy it because you only have 50% of the required resources. Or it may be that you can satisfy the market to the tune of 100% but you just can’t get to it because you don’t have the access or the financial clout to pay for a marketing campaign that would get you there. In these cases and many others it makes sense to partner up and see if you can get to a win-win with an organisation that has mutual but not overlapping interest.

Early experiences of partnering up were I guess rather mixed. A good experience came when we partnered up with training company Parity as early as 2003.

We had access to a lot of people they wanted to get in front of. They had a supply of trainers that we could use for an event on people management. The result was a full day skills fest at the Waterfront that we jointly organised. It started at 9a.m. offering attendees a vast array of side-by-side seminars and workshops on people skills that they could pick and choose their way through right until it finished sometime near 5p.m. I can’t remember how many trainers and sessions were offered that day side by side but it was an event the like of which I don’t think Northern Ireland had seen until then and I haven’t seen much like it since. It was a superb event and something neither party could have achieved on its own.

Right down the other end was a partnership that I really would like to forget. We teamed up with a software company who was targeting the legal market. The agreement was that we would jointly host a seminar which Legal Island would market and administer in return for them covering the cost of the venue and providing one of the two speakers. In our initial meeting I had talked about the importance of the customer experience and that a gentle sell was crucial so as not to damage the customer relationship and they had agreed. I expressly mentioned that there should be no hard sell to delegates. So far so good.

When I arrived to the venue I noticed that two of their sales team were standing at the top of the hotel stairs stopping every attendee from going any further until such time as they had taken their details and asked them for a time for them to take a call to demo their software. I could see some of the delegates looking quite annoyed by this and I was too. I sort out their team leader who was also the guy I had struck the partnership with and pointed out politely what his sales team were doing and that I felt it was too pushy. “Barry we’ve paid good money to be here and we need to get full value”. Maybe they did. Maybe they didn’t but they got no further value from our relationship. We did nothing with them after that. That company, incidentally, is no longer in existence.

Another negative experience was when we joined forces with a well-known recruitment company in the early noughties. I guess partnership is not quite right because what exchanged hands was a bunch of their cash but it’s a story worth recounting now because it’s also to do with business relationships and their true value.

Very early on in Legal Island’s trading life we agreed with a recruitment company to feature links on our site to a dedicated landing page of theirs. I had been into see them to set up this arrangement and came away happy because it was the first time I had managed to generate some income around what was at the time our first website. It was only for a few hundred pounds but it was a start and at that time any income was welcome.

The person I met was head of the recruitment office in Belfast at the time. The meeting went well enough but I got the impression that she was a tough cookie who could be ruthless when she needed to be.

We were linking to a number of organisations from the site and regrettably one link was used by mistake in place of another. To my horror for a while, clicks on their adverts were actually going to the landing page of a competitor. It was one of those moments when your stomach drops and you just can’t believe that such a basic error can cause so much damage.

Understandably their CEO was none too pleased when they found out. In fact she was fuming. As soon as the mistake was noticed I called her in attempt to rectify the situation and see if there was any way we could hold onto the relationship and their business. I could do nothing but throw my hands up in the air and admit our mistake. I explained it wasn’t typical of our service that we take great pride in the quality of what we do but on this one occasion we had made a mistake. I offered her a full refund and something like a further 6 months of the same service for free. Many outsiders might have considered it far too generous but I was on the back foot and feeling too ready to please.

She barked at me and said it was nowhere near enough and that she wanted two years’ service for free. I said I would call her back.

I checked the contract we had entered into. There was a clear clause in our favour that we couldn’t be held liable for any errors “howsoever caused” legally things were tight and on our side. I called her back and agreed to the two year term. There’s was no attempt to repair the relationship or acknowledge my efforts to spurt some goodwill in her direction. Instead, I pictured her coming off the phone to me and announcing to her staff in an open office that she had just screwed us to the ground and got another two years out of us for free.

We never did any business with them again after that. In fact we teamed up pretty quickly with another recruitment company Abacus Recruitment and did some really useful things together and continue to do so. We do because we actually like who they are and how they work and this counts a huge amount for us. I trust their two directors impeccably and I hope they feel the same way about Legal Island. Oftentimes, partnerships are about the relationship you could be in at a later stage rather than the one you’re in at that particular moment. 

Working out whether a business might have an interest in partnering up with you is one thing but assessing whether the partnership is likely to work and get you both into a better place is quite another. How do you do it? If you approach them the chances are it’s because you’ve seen what they do and are familiar with their reputation. But often companies approach you an out of the blue and you have to decide whether it’s a green amber or red light that you have to show them.

Sure you can ask them for an indication of the kitemarks they have which should give you an idea as to how well organised or governed the company is and how well it treats and manages its staff. But request too much and there’s a danger the other party will feel like they’re in some sort of tender process. As two companies size each other up there's a lot of ego around and one request deemed out of place could do an inordinate amount of damage. One of our major concerns when choosing a partner is to be sure we have the same high standards when it comes to customer service and the quality of the service too.

About five years ago we were approached by a company in Dublin who had developed legal training online. They asked if they could demo it to us with a view to us buying into their business or just clean buying them out. As I viewed it online I was immediately sceptical. All the viewer saw was a distant almost postage sized head shot of the speaker who talked sometimes for an hour or more. When I queried what sort of feedback they were getting from users in terms of customer satisfaction there was a pause and then an answer. He said “we find if we go it at the end of the year when lawyers need their CPD points they’re not too bothered about the quality of the user experience.” Immediately I hit the reject button.

One useful tip is this. Before entering into a major partnership agreement give them a simple task or mini project to deliver on first. A few years back I was approached by the founder of a company with a view to partnering up on some really interesting R&D projects they were bringing to fruition. He was clearly a clever guy and struck me as someone likely to make a lot of money at some point in his life. But I had my reservations too. Was he someone that liked to make promises that those behind him just wouldn’t be able to keep up with? I feared he may be.

We diarised a second meeting about a month away. I asked meantime if he could source a few documents from his company for us that we had discussed in the meeting and set up some access online to test certain of his products.  He said he’d have them to me inside a week. Three weeks later and nothing had been sent. I only heard from him again when he called wanting to know why I had cancelled the next meeting.

That’s it for now. I hope you found this episode useful. Please do get in touch if you have any questions or comments. You can do this by emailing me on barry@legal-island.com

See you next time!