Franklin Andaya, Innoventures and the Beating Heart of Enterprises.

“Every organization is just one idea away from unlocking breakthough accomplishments.”

People say an individual’s high school years are one of the best seasons in a person’s life. That is the case for me.

My high school experience serves as one of the memories I treasure deeply. Fact is, when there are nights that the girls are already asleep and dozing off evades me, I reminisce about moments from that era. It’s as if boarding into a time machine, I am transported back to relive the wonder years.

Having great memories from those days, I’d reserve that conversation for another time and pivot this write up to a person. His name is Franklin Andaya.

Franklin is an intelligent classmate of ours. He also had a heart condition which made him tire easily and was almost always found sitting in a corner, catching his breath. Because of his situation, Franklin was exempted from physical activities.

Although we interacted from time to time, we didn’t hang out much as he belongs to a different crowd.

After graduating, the only news I heard about him is that he went into the academe and became a teacher at an international school.

A few years ago, one of our high school classmates came home from the Middle East and invited our batch for a mini reunion in Tagaytay. Many of us came with our families and talked about the good old days. With all difficulty explaining it, a lot of us have changed and at the same time, still are the person we knew back then, proving the adage that people never actually grow up; we just get older.

It was a great night for all of us. It was also the first time I saw Franklin after almost two decades, I barely recognized the guy. I was really glad to see him so we catched up and talked about how life has been since the last time we spoke. He’s now married with three kids and has a stellar career as Operations Manager for a global company.

Seeing Franklin again, I remembered a passing conversation I had with another classmate of ours a few years back about him having a heart transplant.

Now Franklin is a healthy bloke who spends some of his free time biking to and around historical sights in Cavite.

Now, to Business.

As an Executive Advisor whose day to day activities are meetings about strategic management and business operations, I cannot help but see the resemblance of Franklin’s story and the organizations I work with.

I remember in one of my meetings, an Associate told me that data is the currency of the digital age. It’s true. So returning the favor, I responded with another truth:

Ideas are the heart of organizations.

In fact, I would say that every organization – be it a small family business or a global enterprise with sprawling reach all over the world – was once an idea in a person’s head.

Idea is what gives life to organizations. It is also what sustains its existence.

And like a human heart, ideas have a life cycle. Some ideas, due to old age, are no longer healthy and need to be replaced in order for its body – the organization – to survive.

This is what happened with Apple and the historical second act of Steve Jobs.

With bankruptcy rearing its ugly head, Gil Amelio, the CEO who brought Steve back, had a business model idea he thought would take Apple out of its dire situation. Steve had other ideas. He not only wants Apple to survive but to create insanely great products – his original idea of the company.

The rest, as they say, is history.

This, ironically, is what Satya Nadella is trying to do with Microsoft. The company’s third CEO inherited an enterprise whose business idea revolved around the desktop. Now, in the world of mobile phones and tablets, Nadella infused Microsoft with an idea that’s apt to the times and is now playing catch up by pivoting the once-leading technology enterprise into the new era.

But some businesses choose to stick to ideas that are way past their sell-by-date. This is why we have Kodak, Blackberry, Blockbuster, Sears and Polaroid as case studies.

Getting Practical.

Here’s the point: in many cases, a heart transplant gives life to an almost dying body. It goes the same with organizations. An idea transplant can turn a near-bankrupt enterprise into the most valuable company as the case with Apple.

The idea of idea transplant is a common practice at Innoventures and BTL Venture Capital.

Take the Featured Associate as an example. At BTL Venture Capital, we invite interns (whom we call Associates) to join our companies and help us build something great.

In the early days, we had difficulty attracting candidates to apply for our Associate Program since BTL Venture Capital wasn’t a recognized firm yet. We used the traditional way of recruitment back then so I decided to shake it up and experiment. Everything changed when we stumbled upon the practice of using existing Associates who share their work experience at BTL Venture Capital as invitation material.

Having an actual Associate with their photo and alma mater talk about what it’s like at BTL Venture Capital more than doubled the number of applications of our Associate Program.

With an idea that’s proven to work, we evolved it into featuring CEOs and startup founders who apply for Seed Capital infusion. The result is staggering.

In one instance, I received two separate phone calls in one day. One is from a Corporate Executive who has an idea to disrupt their industry. The other is a founder and CEO from the financial industry who want to scale their firm.

Both numbers were unrecognized. Both said they saw the Featured CEO publication and scoured to get my contact details from reading my blog and posts. Both wanted to engage for Executive Advisory. It did not escape my mind to think I was getting Punk’d.

Innoventure: Coffee Crafters and Shapets.

Being part of another enterprise, Innoventures is a digital conglomerate with a portfolio of tech companies in five industries: e-learning, e-sports, e-commerce, e-health and e-food.

Under e-food is Coffee Crafters, our tech play in the coffee space. With the purpose of empowering people to craft their own unique coffee experience, I serve as the Executive Advisor of its fantastic co-founder and CEO, Miko Lapira.

Now with two wins under its belt, I floated the refined idea of Featured Customers as a marketing tool to increase movement of our gelato, create brand awareness and customer loyalty as well. Weeks after implementing this, we sold out our products last week and had repeat bulk orders this week.

Now we’ve adapted the practice and transplanted the idea to our Community Partners program – our franchise business strategy. We just featured our first Community Partner, Pam Kang, a Veterinarian from Taguig last week.

Within the Innoventure ecosystem as well is our tech startup in the pet space, Shapets.

With the purpose of providing the best pet care for our babies, Shapets, founded by its CEO Amanda and CTO Mikez, is the first Philippine platform for the pet community. In our sessions, we are also integrating the practice of Featured Enterprise Partners in order to gain traction of attracting more customers to visit the platform because of having more options, which then kickstarts the flywheel of growth as having large foot traffic attracts more enterprise partners to onboard the platform.

Closing thoughts.

The flywheel of growth mentioned that Shapets is trying to accelerate is nothing new. About twenty years ago, a small company founded by a first time CEO stumbled upon the framework. He saw that attracting merchants on his platform amplified the foot traffic of customers, which then attracted more merchants to be part of his digital marketplace and feeding off one another, the upward spiral continues.

The name of that company is Amazon.

So I’d like to end this write-up with a question: if it’s proven to work, then what’s stopping you from doing it?

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Florentino Hernando is the Managing Director of FAHernando Consulting, an Executive Advisory firm with the mission to accelerate performance by 100x.

An Investor’s Guide.

“Ideas are stronger in ink.”

A couple of weeks ago, I was invited by my friend Mentor Myron Sta. Ana to be interviewed in his weekly talk show, “Myron Kaming Advice.” 

The CEO of MSS Business Solution, Myron is our country’s very own Corporate EnterTrainer and Soft-skills Guru, it was such an honor to be invited and talk about scaling startups. 

During the show, Mentor Myron inquired of me a very particular question, one that I often get asked: 

What qualifications do I use when investing in a business?

As an investor together with my Partners at BTL Venture Capital, as well as doing my own Angel Investment on the side, I gave the usual response.

“First, like in F1 formula racing where it’s really the driver, not just the car, we invest in the team, not just the business,” I said.

“Second, we look for entrepreneurs who are doing something already rather than someone who plans to start something. The former shows initiative, drive and proactivity, that the entrepreneur will build something with or without us. That’s the kind of people we would love to invest with,” I added as we moved on to the next question.

For a bit of background, I have spoken to hundreds of entrepreneurs of every kind in the course of my career.

From aspiring and first-time, to those who are bouncing back and serial entrepreneurs, I have learned that almost all of them ask less for financial capital and more for advice in getting traction and scaling their startup into solid ground operations.

As a rule of thumb, I invest in both capacity: intellectual and financial capital. By that I mean, the most common practice is that I get invited to sit on the board or work with the founding team as the Executive Advisor to start and scale their enterprise for equity. But in many instances as well, I invest financial capital from my own personal account only after I helped the company operate efficiently. 

I wish I could tell you that all the investments I did turned to gold, but that would make me a demi-god in comparison to every Silicon Valley VCs.

Where investing in businesses and partnerships are the norm in other countries especially in the west, the truth of the matter is, very few businesses in the Philippines are aware of how venture capital and angel investing works. And I’m talking about already established, multi-decade small-medium enterprises here.

Our legal system also reflects that since most Memorandum of Agreements (MOA) signed by both parties, at times, mean little when the business grows or goes bankrupt, depending on which side of the agreement you fall under.

Brain Rape. 

In fact, I’ve had my fair share of ‘brain rape’, where I, in good faith, provided my expertise for a certain share of equity, only to have our agreement rendered null and revoked once the results (and along with it, the cash) comes in.

To protect the innocent and the guilty, I don’t mention the specifics and am only sharing my story for the educational purpose of you, my dear reader.

In one instance, after I had provided Php 500, 000 (at the least) worth of Executive Advisory and other services as partner, a CEO sadly claims she did not fully understand the terms of the engagement and expected me to funnel capital to her business after we signed the dotted line and since it didn’t happen, revoked our agreement. 

I spoke to our legal counsel for insights but I was clear that I am not pursuing any lawsuit since she is a colleague. Our lawyer advised us that if that is my decision, we’ll simply file it under “negotiating in bad faith” and recommended never transacting with her in the future.

The Secret to Scaling. 

So learning my lesson, I reflected and asked myself to come up with clear, specific and unmistakable markers that would compel me to invest both my time and money and then – here’s the most important part – put it in ink.

You see, I already know what I need to know from a business to become an investor. And that is the problem: only I know what I need to know.

Drafting it on paper helped me to simplify what I want and the exercise breeds residual dividends.

Here are two markers: Tenacity and Track Record. 

By Tenacity, I mean I invest in people who will build their startup dream into reality come hell or high-water, with or without me.

By Track Record, I mean the entrepreneur already has the ability to hit the company’s  targets evidenced in its past performance preferrably six (6) months or in some cases, three (3) months at the very least.

With Tenacity, you have my Executive Advisory. With Track Record, you get my (and my network’s) money.

It took me a good, mind-melting 15 minutes to simplify the guideline that would forever dictate how I would operate when it comes to investing in businesses.

So in closing, let me shift gears to emphasize the principle “write every time” as a final concept.

This philosophy of putting my ideas in ink enabled me to step back and forced me to be in blinding clarity of what I believe is my guideline when it comes to investing in businesses. 

This one time act of putting my ideas in paper is like the paradox of lifting weights: exhausting my muscles actually made them stronger.

If you haven’t realized it yet, making decisions is mentally draining. Hence, with my principle in ink, I made a one-time decision that would render hundreds of mini-decisions that come after either easier to make or completely irrelevant.

What is exhausting for five minutes will not only ensure I make the right moves now and in the future, but scales my impact by giving me more time since I can now let others do the work on my behalf: they just follow the written principle.

And that is a fundamental building block of scaling: write down your ideas.

Final thoughts

We’ve covered a lot in this write up so as we come into its conclusion, let me summarize the key points. 

First, when investing, focus mainly on the people and secondarily on the business. Look for people who will make their dream a reality with or without your help, whatever it takes. Also, a good track record of past performance is a leading indicator to invest financial capital. 

Second, making decisions is mentally exhausting, hence designing a guideline that would serve as the basis of what you consider as a good decision.

Finally, put that guideline on paper – read: write it down – to enable other people to make the right call even in your absence. This practice frees you to have more time to pursue other productive things. 

From that late-night interview to understanding the building blocks of scaling enterprises, let me challenge you to put these ideas in action right now. 

Let’s get to work.

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Florentino Hernando is the Managing Director of FAHernando Consulting, an Executive Advisory firm with the mission to accelerate performance by 100x.

Little Bets.

“Experiments never fail.”

When I look into it, I can consider myself as someone blessed with a satisfying career.

As an Executive Advisor who whisper management innovations and organizational strategy in the ears of CEOs and business leaders, helping them accelerate the performance of their companies is as good as it gets.

But it seems that He isn’t done with me yet. He has another plan in store and brought me to a new season in my life: I became an investor. 

It started at the heart of the pandemic. Having four friends as partners, we launched our venture capital firm. Aptly named BTL (Build to Last) Venture Capital, we are on the lookout for tech startups who need seed capital to scale their business.

Recently, I’ve invested financial and human capital in co-founding Innoventure Holdings, the first and only digital conglomerate in the country. 

With 20+ startups in five spaces – e-commerce, e-health, e-learning, e-kitchen, and my partner’s apparent favorite (which is rapidly becoming mine as well), e-sports – Jason and the founders are on a mission of creating impact through innovative ventures.

Add to that, as an Angel Investor, I also serve as Executive Advisor to a handful of businesses and work with each CEO in creating flawless operations and scaling up excellence.

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In this new endeavor, I’ve heard pitches from different entrepreneurs and companies – tech startups, logistics and dropshipping, and notably, one founder asking for several millions to launch his exciting dream park somewhere in Pampanga.

But I guess what stands out is the one I heard from a close friend. Planning an idea, he told me he’ll subtly go into combat with a well known foodcart franchise, undercutting them with lower price as his competitive advantage.

Six years later, not only did he not become a worthy competitor to the said company, as far as I know, he hasn’t even launched his business yet.

That’s one problem with big dreams: it sometimes becomes too overwhelming to start, we end up not doing it at all.

Which is why I am a proponent of small experiments long before it was fashionable.

Little Bets, as I like to call them, are a series of small scale, multiple experiments in rapid succession of iterations.

In a world where bigger means better and considered the ultimate measure of success, it seems counterintuitive to go small and inconspicuous. But I do this for three simple reasons:

Small is easy: it requires less resources – effort, materials and capital.

Small is fast: less resources, faster to do, launch, and re-launch. 

Small is cheap: less resources, faster to make. Plus: not too costly in the event of failure.

This is where Shapets comes in. On a mission of making excellent pet care accessible and attainable to pet owners and pet lovers in the Philippines, it is our tech startup in the pet space. 

Not unlike the mantra about racing – it’s not the car but the driver behind the wheel – as an investor, I follow the same principle: I focus less on the idea and more on the people, specifically, the team behind it.

Founded by Amanda and Mikez, the dream is to create a digital platform, a one-stop shop for Pet Parents. Yet as big as the dream is, they started small by first creating a community through social media pages and providing one product (easy to make, less resources needed, fast and cheap) to its members.

As the community grows, it becomes easier to validate concept by introducing just one thing. One offerring makes it easy to focus, get feedback by seeing how the market responds, and fine tuning accordingly. 

Closing Thoughts

Little Bets make it easy to achieve quick wins. As my partner Jason like to say: we win the war by winning lots of battles as quick as possible.

So write a book and start with a page. Have one million pesos in the bank by saving that Php 1000. And yes, build that startup dream of yours by starting that Facebook, LinkedIn, and Instagram account. 

Think big. Start small. Move fast.

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Florentino Hernando is the Managing Director of FAHernando Consulting, an Executive Advisory firm with the mission to accelerate performance by 100x.

Execution Unboxed.

“You don’t win on good intention. You win on great execution.”

A few weeks ago, I became part of a business ecosystem being established by a collection of entrepreneurs and business leaders. The intention of the community is captivating as it is noble. They, however, apparently seem to be experiencing organizational challenges that forced the operations to a grinding halt.

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Being the nosy person that I am, it’s unsurprising that a week later I am in the middle of the action, designing the DNA of the community together with its organizing committee.

In the words of the team, the Business Connect Community (BCC) reboot was initiated with its refined purpose of empowering entrepreneurs to build Christ-centered enterprises.

As a side note, I’ve built business ecosystems and am a part of a few but nothing is as important as BCC because it is filled with Business Leaders who value excellence with equal dedication of expressing Christ-like character and deep faith.

Rarely do I find a circle who exhibit both operationally excellent practices married with strong conviction in honoring God with their businesses.

What I found surprising though, is the moniker I sort of earned among the team: Activator.

Team members, in one way or another and on different occasions, acknowledge how fast I move and get things done. Some told me they are inspired by it. Others, I believe, are exhausted because of it. But being the gracious Christians that they are, one has yet to pull me aside and reprimand me for being a whirling dervish.

Surprised by Execution.

In one apparently casual conversation, I spoke about a promising idea with another entrepreneur. He asked me to have a sit down meeting with him and flesh things out. So we aligned on a date and said our goodbyes. As a habit, I sent him a virtual meeting invite right after and then went on with my day.

A few moments later, I was notified with a message from the entrepreneur who was genuinely surprised at how fast I operated.

“If it’s worth doing” I said, “then what are we waiting for?” was my response with a touch of humor.

The Curse of Knowledge

When something’s second nature to you, you completely forget what it feels like not knowing. This is the Curse of Knowledge. And this is the way I am with rapid execution: it has become natural to me, I often forget not everyone moves as fast as me.

So I sat down and reflected about how execution became a habit of mine and what principles guide the way I act. After some time, I came up with three things.

Execution is a Discipline.

Execution is a set of behaviors or series of activities one does to achieve a desired outcome. Setting clear goals, metrics of success and timeline, mapping the step by step process and holding oneself accountable for the result are the building blocks for getting things done.

Moreover, like any discipline, one becomes better the more it is practiced. The more we practice the fundamental elements of execution, the more well-versed we become.

Execution is Intentional.

No one loses 100 pounds by accident. To shave off those excess fat, we have to purposely lift weights. One does not wait to find himself wandering in front of the gym; that almost always never happens.

With execution, we have to consciously choose to put off excuses, get our bums off the couch and do what needs to be done, when we say we’ll get it done. And we have to consciously do it moment by moment until it becomes completely part of who we are.

Put simply, we have to intentionally choose to make execution a habit.

Execution is Simple.

There’s no mystery about it. Being clear on what you want to accomplish, when you want to accomplish it, how you intend to accomplish it through a step by step activity does not require a Ph. D.

For sure, simple does not automatically mean easy. Yet through these specific actions, execution becomes easier.

Final thoughts.

Execution is less about intensity and more about clarity.

When outcomes, metrics and strategy are clear, things happen freakishly fast. Things get done and momentum accelerates, catalyzing a results-driven cycle as each accomplishment builds on the one before. An execution culture by then must be maintained with intense consistency.

And with these things in place, no one will be surprised by execution any more.

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Florentino Hernando is the Managing Director of FAHernando Consulting, an Executive Advisory firm with the mission to accelerate performance by 100x.

The Shortcut.

In the early 2000’s, I found myself tasked to lead the youth ministry of a small church.

It was my first leadership assignment and being desperate not to make a fool out of myself, I decided to read John Maxwell’s 17 Essential Qualities of a Team Player.

I have never had a bookless hand ever since.

Books, I discovered that day, contains wealth of insights that allow me to accomplish my goals quickly by standing on the shoulders of those who went before me.

Simply put, it’s a shortcut.

Let me digress a bit and allow me to vent a little.

Up until now I still do not understand why leaders (and those who aspire to be one) do not read on a regular basis.

In my management classes, I ask a show of hands who has read at least one leadership book the past month.

It would be the day hell freezes over if I get at least 40% of hands raised.

When I probe deeper, the response I get from these people managers is one too common:

I’m too busy.

To which I say: Bullshittake.

It simply shows we’re too arrogant, we don’t see the need to learn and keep getting better or we’re too lazy to take on the mantle of leadership seriously.

Either way, that’s a lame excuse (which obviously make my blood boil since leaders don’t make excuses).

You and I as leaders are entrusted with the enterprise’s most precious resource – people.

We owe it to them to be led well. And one of the best way to grow, improve and lead well is through reading the books written by the best minds on the subject.

If you’re too busy to read, grow and learn, then you’re just too busy. Better give up your leadership badge and give way to someone who is not.

So going back to the point, over the years, it has become my habit to learn from and stand on the shoulders of giants: from CEOs Bill Gates, Steve Jobs, Jack Welch and Andy Grove to advisers of CEOs Noel Tichy, Ram Charan, Tom Peters and Gary Hamel.

Fifteen years and a satisfying career later, I started my consulting firm.

True to form, I’m reading How Clients Buy and it’s helping me tons in the way I operate the business.

I’m once again taking The Shortcut, tapping into the wisdom of two successful consultants.

The wisdom that took them years to gain require only a two-hour investment on my part.

“While it is wise to learn from experience”, Les Giblin observed, “it is wiser to learn from the experience of others.”

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Florentino Hernando is the Managing Director of FAHernando Consulting, a managment consulting firm with the mission to build great companies.

Building the Hundred-Year-Old Enterprise.

It was a little over 30 years ago when two Stanford professors named Jim Collins and Jerry Porras decided to study Visionary Companies to unpack the secret behind their success. As defined, Visionary Companies are premier organizations that are widely respected, the best of their kind, and institutions that are imitated by many, admired by all.

Household names such as Procter and Gamble, Johnson and Johnson, Walt Disney and Philip Morris are among those who showed up on the list. Not bad a roster for bench-marking.

Eventually becoming a best-selling classic, the book Built to Last preached that what matters to these Visionary Companies is not how excellent their current performance is, but how they can ensure the continuity of operational excellence.

Thus, Succession Planning is thoroughly embedded in the fabric of the organization.

Fast forward today.

Looking at the business landscape, my observation is that Succession Planning is just a buzzword. Organizations toss it around and Executives demand their HR Heads to build one, yet often it’s nothing but just a hype, more of the proverbial flavor of the month.

Until it’s too late.

An Executive leaves and business operations is hampered. A key person decides to jump ship to a greener pasture and progress grinds to a halt.

Employee turnover, once tolerable, now becomes a nightmare.

So Succession Planning has come of age as organizations are now waking up to the value of having a business continuity plan in place.

Learning from and Building with the Best.

I’ve always been infected of the productive paranoia in ensuring continuity of exceptional performance long beyond my tenure, and as luck (actually, it’s God) would have it, not only did I get a front row seat of watching how to design one, I was given the reins in driving and developing the Succession Plan for an organizational behemoth.

A few years ago, the company I was working for got acquired by a prestigious and listed Filipino conglomerate and became part of its holdings company as a subsidiary.

To create alignment, each subsidiary’s HR Heads were incorporated to the holdings company’s HR Council.

In less than a month after the acquisition during our first meeting as HR Council, the announcement was made: all subsidiaries are mandated to align with the Succession Plan Model of the holding company and submit the Talent Development Pipeline of each individual subsidiary.

Obviously, Mommy doesn’t have time for pleasantries, so enough with the hellos and let’s get down to business. 

The next month was a whirlwind.

I was scouring to and fro department managers offices, briefing each and all teams about what a Succession Plan is, what it means for everyone, facilitating workshops on how to do it, and fielding questions in between. 

Looking back, it was one of the most profound and fulfilling experiences in my career, a core competency I enjoyed and acquired, and have since integrated with my Client Partners in our Executive Advisory engagements.

Let me briefly share a simple process on how to draft one. 

First Step: Identify the Crucial Positions (Key Seats).

Business will continue if key seats are occupied. It’s pretty straight forward. So the first task in building a Succession Plan is to identify the seats that drive the company.

How will you know if a position is crucial? Let me share three things:

• Business Impact if vacant: Impact on Customer Relations, Development of New Products or Services, Business Growth.

• Scarcity of Skill-Set: Required skill for the position has low market of talent or they’re hard to find and develop.

• Operational Impact: Impact on efficiency, if position is left vacant, slows down production.

Second Step: Identify the Crucial Traits.

Key positions require key traits, characteristics that would make the position work.

This will vary depending on the position and the company. But learning from the best, let me share some of the key traits we were asked to look for in a key role:

1. Quick Learner.
2. Team Player.
3. Consistent High-Performer.

But that’s putting the horse before the cart.

Doing the first two steps will ensure a plan is ready. Over the years, however, I’ve seen that without a couple of little things, any Succession Plan Model is doomed to fail.

The Fundamentals: The Cart then the Horse.

In 2014, JobStreet decided to find out who was the preferred company to work for by Filipinos. Up until 2017, the holdings company we belong to was ranked #1 for three straight years. 

Not bad for a hundred year old company. This old dog definitely has a lot of new tricks up its sleeves.

Clearly, the enterprise’s Succession Plan proves a success and I believe it’s because of two simple things:

#1: It is driven by Top Management.

The company’s basic philosophy when it comes to talent development is that it is driven by top management. Proof?

A robust in-house leadership university is up and running, producing the kind of business leaders the company needs. Aside from that, all external training of each subsidiary must first be approved by the CEOs of their respected company and then forwarded to and be approved by the holding company’s President. 

In fact, I have yet to encounter – before or since – a local company as hands-on when it comes to talent development like this one.

#2: As a company, the enterprise has a compelling reason to exist.

A Succession Plan is doomed to fail if the people inside the business do not have a compelling reason to continue running the business.

Profit, or money, though an awfully good reason, is not enough to sustain effort.

If the reason for an existence of a business is simply to make shareholders happy by making more money, I doubt the employees who run the business would stay when a more lucrative financial offer is given by a competitor.

In one of our HR Council  meetings, a representative from the holdings company spoke of third party providers.

He explains the monumental value of being able to do business with the enterprise, citing other third party providers who landed new customers after mentioning that it is one of their clients.

More apparent however was underneath his discourse is the behavior that exudes the feeling that the company is so integral to the Philippine economy, we must never cease to operate or risk sending our nation into economic turmoil and bankruptcy should we suspend operation for a day.

One may comment on such tone as sheer arrogance. Perhaps. But it is difficult to deny that the company has found a strong reason to continue to exist.

And over 130 years later, they’re still here. And from the looks of it, with their recent success of the infrastructure division in their business portfolio, it seems they are just getting started.

Closing thoughts.

Performance excellence is not enough. Consistent and sustainable excellence of performance is the name of the game. And the key to sustainability is a robust Talent Pipeline.

Nevertheless, unless the company provides a compelling reason for its existence, sooner or later it will be difficult to sustain its energy to pursue excellence in performance.

Succession Plan works best when there’s a compelling answer to this question:

Why continue?

——————————————————Florentino Hernando is the Managing Director of FAHernando Consulting, a management consulting firm with the mission to build great companies

Being the Company Customers Can’t Live Without.

“Don’t find customers for your products. Find products for your customers.” – Seth Godin.

In Start-up Growth Engines, authors Sean Ellis, Morgan Brown and the GrowthHackers.com Team featured several startups who were able to scale freakishly fast as case studies and  unpacked the practices they employed to achieve such a feat. 

From Yelp and Uber to Square, Snapchat and Linkedin the book is a must-read for aspiring, first-time entrepreneurs and even seasoned business leaders. 

The recurring idea is that the catalyst of growth acceleration begins by creating a ‘must-have‘ product or service – things that your identified customers cannot survive without.

In order to create such must-haves, a company must unearth what is called pain-point – things that, at the least incite a gnawing frustration or at worst potentially cripple the business – and then obsess about creating the perfect solution to not only alleviate but totally eradicate this predicament. 

Back to Basics. 

My biggest takeaway from the fantastic reading however is not the specific tactics these companies used to go on hypergrowth – and there are many – but rather a more fundamental principle of entrepreneurship.

In Business Class 101, the conventional teaching is starting a company by answering the question ‘what problem are you trying to solve?‘

I realized, however, this idea encourages putting the cart before the horse. Before we identify what problem our enterprise is designed to resolve, we must first identify who our target customers are.

Companies Exist for the Customer (and money second among many).

This business fundamental – identifying the specific customer you want to serve – is so basic, it’s often overlooked. 

In truth, my inbox receives messages requesting for an Executive Advisory engagement because this simple idea was skipped over. I guess the reason it’s overlooked is because it’s so, well, simple.

I can count on one hand the number of engagements I facilitated where I asked the executive team who, as a company, is their customer and got one common answer. Usually, in a group of ten people, that question gets ten different answers.

This shouldn’t be the case.

An enterprise must create Alignment, Agreement and Accountability (Triple A) on who they are trying to serve. 

In marketing, Brand Consultants call it a ‘Brand Persona‘, an attempt to identify what and how the target customers think, feel, what they say and how they sound, their level of education even to the point of giving it a name.

But that is only half of the equation. Aside from knowing who your customers are, the other question that must be answered is what essential value – one that they cannot live without – are you providing them?

This is the (not so) secret in creating must-haves: knowing as specific and detailed as possible who your customers and what their pain points are and then marrying it with your product and service.

One Last Step. 

Who are your customers? What essential value – one that they cannot live without – are you providing them? 

These are the fundamental guiding questions in building must-haves which lays the foundation for hypergrowth. The final step is drafting a statement and creating Triple A around it.

And here’s the kicker: when you use the answer to the essential value question as your purpose statement, you suddenly transition not just a product or service, but your entire company into becoming the must-have.

Final thoughts.

Making it practical, I’ve come up with a simple framework which I use in helping clients craft their own statement:

We are [Your Identity] who [What You Do] [Your Target Customer] [Your Purpose].

Here’s a sample from Start-up Culture Clotheshoppe, one of our businesses:

We are culture-shapers who inspire entrepreneurs in building the Start-up dream into reality.

Of course, what better way close this write-up but with FAHernando Consulting‘s statement:

We are Strategic Partners who help Executive Teams and Business Leaders accelerate performance by 100x.

——————————————————Florentino Hernando is the Managing Director of FAHernando Consulting, a management consulting firm with the mission to build great companies

How the Titanic and Companies Sink.

I was facilitating a development session for a HR team when a question was raised: why do companies fail?

Now this is a loaded question with a million ways to answer it.

From the blatantly obvious evil management (think Enron) to being unable to anticipate nor adapt to the changing times (remember Kodak, Blockbuster and Polaroid?) to corporate chiefs just making bone-headed decisions (GE’s Jeff Immelt and his backup jet), the list goes on.

But I find the simplest answer is often the best.

With almost two decades working in and with organizations both as a corporate man and then later as an executive advisor, I can say to the core of my being that it ultimately boils down to the human side of the enterprise.

“It’s having the wrong people,” I said. “You have the right people, nothing else matters. You have the wrong people nothing else matters.”

“You have the right people,” I continued, “it doesn’t matter how scarce the resources are or how severe the circumstance you’re in, they will always find a way.”

“You have the wrong people, it doesn’t matter how advanced the technology you possess and how much financial capital you have, they will always find an excuse.”

Now, this is nothing new to many of the readers. One way or another, we all know this intuitively at the least and by experience at best.

So as I reflected on it, I was able to narrow down the focus and identify at its most fundamental level how companies fail:

Somewhere, someone deep inside the organization didn’t do what they’re supposed to do at the exact time and specific number of output needed.

Put it plainly, it’s a failure in execution.

Whether business, non-profit or church, an organization is an operating system. It is an assemblage of interconnected activities aligned in pursuit of achieving a specific outcome. And like any system, a malfunction of just one piece has massive repercussion and affects the entire operation.

When someone fails to execute at the level required, another person will have to compensate for the incompetence that occurred, which in turn affects the quality of their ability to execute their own task, ultimately requiring another person to recoup the shortcoming.

Hence the domino effect of failure in execution cascades to the entire system.

If one incompetent person can affect the whole system, imagine what happens if ‘excuse-ion,’ not execution becomes the culture.

Putting it all together.

In closing, organizations primarily fail when there’s a breakdown in execution at its most fundamental level.

So having right people is the basic building block of a vibrant operation for the right people will always find a way to get things done come come hell or high water.

Remember, you don’t need multiple holes to sink a ship. The hole also doesn’t need to be big one.
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Florentino Hernando is the Managing Director of FA Hernando Consulting, a management consulting firm with the mission to build great companies

The Apocalypse Effect.

BTL Ventures, Start-ups and Leadership Lessons from X-Men: Apocalypse

In 2016, the ninth installment of the X-Men series, Apocalypse hit the theaters.

Accidentaly awakened in 1983 after being entombed for thousand of years, En Sabah Nur, the first mutant, decided to destroy and then reshape the world according to what he envision.

Also hailed as a god named Apocalypse, he began building his team by recruiting weather-controlling mutant Ororo Munroe, Angel and Psylocke and then strengthening their abilities.

Apocalypse mere presence amplified the abilities of the mutants in his team.

Minus the megalomania, Apocalypse leadership teaches us a valuable lesson: our presence must amplify the abilites of those we lead. (Photo Credits: wallpapers.com)

While enjoying the film, I couldn’t help but see the resemblance, a perfect example if you will, of what leadership looks like when it’s working right.

Leadership Lessons and BTL Ventures.

Minus the obsession to rule the world, Apocalypse got it right in terms of team leadership by upgrading the capabilty of those he lead.

At BTL Ventures and the start-up companies in its network, we have a saying: our businesses are built on Intern blood.

It is through this we practice The Apocalypse Effect: the people we lead become better because of our leadership.

We strengthen the team’s skill set by providing them opportunities – a platform – where they can practice their profession.

College students who haven’t earned their degree yet are asked to start teams and build departments from scratch.

Case in point: our client engagement associates – all Interns – are expected to research, reach out and connect with clients to convince them to invite us to be their Strategic Partner and help them grow their business.

In the corporate world, leadership is a position people aspire and get promoted to. Not at BTL Ventures.

In our firm, leadership is a platform that’s provided to the team where they can showcase their capabilities.

For sure mistakes are made, lots of it. But that’s how you and I and the millions of successful leaders grew and got better: by doing it and learning from experience.

Final thoughts.

The most important job of the leader is to help their team get better.

The best way to do that is not to dictate every single thing individual team members must to do but to act as a platform by giving opportunities and empowering those who are under one’s leadership to exercise their abilities.

It’s time to shift from Positional Leadership and start practicing Plarform Leadership.
——————————————————
Florentino Hernando is the Managing Director of FA Hernando Consulting, a managment consulting firm with the mission to build great companies.

When Crazy is a Compliment.

The young woman gave a baffled look and tried her best to politely smile, only God knows what’s going on her mind at that moment.

“So,” I asked, the team, “has she been asked the sanity question?”

I then spoke to the young woman on my screen. “It’s hard to start a company,” I said.

“It’s brutally hard to start two companies,” I continued.

“We’re starting three. In a pandemic. As you can see, we’re not normal. The people inside the company you’re joining are insane.”

Not the best way to recruit someone. At least that’s what textbooks say.

BTL Ventures: Intern Inside

A couple of days later, that young woman, a recent graduate of Business Administration and Accountancy from the University of the Philippines (Cum Laude) is in a consulting meeting with a business owner together with her fellow Interns.

Jersy wasn’t the first to undergo this unorthodox (crazy?) type of interview and she definitely won’t be the last to be asked that question.

It began with Angel who started FA Hernando Consulting’s business development department and then interviewed Gummy, ultimately ending up building BTL Ventures’ social media presence together.

There’s Kate who picked things up where Angel left off and built the business development team into what a powerhouse team it is now.

There’s Denise who, after barely joining, invited Justin, a whiz on the numbers, and built the Finance Department from literally nothing.

Alvin, the quiet and reserved senior from La Salle who asked what effect will the internship have on his academics if he fails a project, blew us away being the phenomenal strategic thinker and implementor of marketing campaign of our third start-up.

And the MA Industrial Psychology student Gritz is the person behind why we have top-class intern talent pool and the builder of our Human Capital department.

Yes, in a world where Internship means making coffee for everyone, photocopying documents and reports, wrapping birthday gifts for the Manager’s daughter and doing clerical tasks that requires minimal brain power, it really is crazy to give students and inexperienced professionals such massive responsibility.

Or is it?

Which is crazier?

To have young and vibrant minds, educated by the best schools in the country be available in a company’s disposal and ask them to put their brain on ice?

Or to tap their inexperience, unleash their brimming ideas and demand their best work in building departments, business and financial models, and companies?

So here’s the lesson, one I regret not learning earlier:

The campus is where the future is created.

Let’s not view them as mere students in need of direction since they don’t know their nose from their ears but as Entrepreneurs, Business Owners and Corporate Leaders.

Final thoughts.

I can’t say this enough: our start-ups are built on intern blood. They are the backbone, the brains and the builders.

So yes, we’re foolish enough to believe that these young amateurs can, will and has began catalyzing change in the business landscape; all they needed is the opportunity to do so.

History is on our side: Larry Page. Sergey Brin. Mark Zuckerberg. Bill Gates. Steve Jobs.

So be crazy, because the people who are crazy enough to believe they can change the world are the ones who do.

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Florentino Hernando is the Managing Director of FA Hernando Consulting, a managment consulting firm with the mission to build great companies.