• There are few guarantees in life but I can guarantee you that it will be far more costly to deal with these types of problems after they arise than to take some simple steps to prevent them from occurring in the first place.
• I hope you find this guide useful but please remember that everything in it is general information only and nothing in this guide is legal advice.
• One bit of advice that I will give you is that when it comes to something as important as your business, you should seek expert help in managing risks before they ever become problems.

Managing social media risks: a legal guide for your business

How is Social Media different from traditional media?

Traditional broadcast media is one to many. Social media is one to one and many to many. In social media everyone is a publisher, everything that happens online happens in public, in real time and leaves a permanent trace.  Social media is about people, the clue is in the name.

How do people use Social Media?

Some people don’t understand social media and don’t use it properly. It isn’t a form of one way broadcast: issuing press releases and news items from a Twitter account or Facebook page might get a certain amount of attention but for things to really work in social media there has to be a two way engagement:

• This is the essence of it and the beauty of it. People develop real relationships via social media which can be a very strong bond with your business.
• However this is also the riskiest aspect of it from a business owner’s perspective as it is not something that can be readily controlled as it happens in real time. And because you have real people on both sidse of the interaction, if the person representing your business doesn’t have a clear understanding of what they can and can’t do and what does and doesn’t work, there is potential for serious damage to be done in a very short time.

How not to use Social Media

Let’s looks at one example of how not to use social media: Anthony Wiener, US Congressman and an early user of social media. He had a considerable Twitter following and you would have thought he knew what he was doing on the medium.

For anyone not familiar with Twitter there are basically two ways of sending messages – public or private.

• Mr Wiener took a photo of his groin in a certain state of arousal and sent it via a message on Twitter to a female follower. He meant to send it as a private “Direct Message” but he pressed the wrong button and it went as a public Tweet. The consequences for him were catastrophic.
• His first reaction was a common one on social media, he claimed his account had been hacked. However, overwhelming evidence of the contrary was provided by a huge number of helpful Twitter users and Mr Wiener had to come clean. He ended up resigning and making a tearful apology on American TV.

Click here to view the embedded video.

This is an example of someone who should have been familiar with the medium and who was in personal control of his own social media content who made a drastic error of judgement combined with a simple technical mistake – he pressed the wrong button.

I cannot think of a better example to highlight the importance of taking appropriate measures to set clear boundaries, to manage social media use when businesses consider letting others, either inside or outside their business, control social media content which impacts directly on that business’s brand and reputation.

Law is playing catch-up

Users aren’t the only ones who sometimes don’t get social media or use it appropriately. Lawyers and the courts have also been slow to really come up to speed and understand how social media works and what is the most appropriate means of dealing with matters when things go wrong.

What have been referred to as superinjunctions in the UK have shown up how the law has had difficulty in dealing with the problem presented by social media use.

• Superinjunctions in the UK have generally come to refer to the type of injunction taken out in advance of a story being published to prevent it getting out. Here the reasoning goes that if the court application for the injunction itself was reported that would defeat the effect of the injunction and therefore the superinjuction prohibits any report of the fact that it was applied for in the first place.
• But these injunctions sought by lawyers at extraordinary expense have proved, in the case of some individuals, to be a complete waste of money. The injunctions involved are extremely high powered and expensive legal devices, but in these cases were singularly ineffective in achieving the desired result. It seems to be a clear case of not understanding the medium when considering a legal course of action with a view to achieving a desired objective.
• So those familiar with the medium have come spectacularly a cropper on it and even the most well paid lawyers have failed in protecting some individuals from their own folly on social media – so does this mean that you shouldn’t use it for your business, absolutely not.

What you should do is understand the risks associated with the medium and manage those risks effectively.

What are the risks and how do you manage them:

1. Defamation.
2. Employment Law.
3. Privacy and Data Protection.
4. Third party agreements – third party postings and suppliers/outside consultants.

# 1. Defamation

It is a sign of the change in communications that I as a lawyer am writing a general guide for business owners on defamation. Just a few years ago this would have made no sense other than for those in the publishing business. However social media now means that all businesses are publishers.

So let’s take a look at what we’re talking about:- 

In simple terms defamation occurs when a false statement is made about another person that damages their reputation. However it has to be communicated to someone else.

• If you have two people together and one says to the other “you are a liar and a cheat” there is no defamation. There may have been a punch thrown but there won’t be a legal action out of what is said.
• If someone says to someone other than the subject of the statement “that man is a liar and a cheat” now you have the start of defamation. And if someone stands up in front of a room full of 150 people and says “he is a liar and a cheat” well then you really have defamation. Although the first practical rule of defamation proceedings is that the person responsible has to be worth suing in the first place, and I’ll come back to that in a moment.

When we’re standing up in front of a room full of people we’re usually pretty careful about what we say because we feel the glare of the public place.

Posting online can feel a lot less inhibited as Mr Wiener found out to his cost. And defamation does not have to take the blatant form that I have chosen here of calling someone a liar and a cheat, it need just be a statement that is untrue and causes harm to the reputation of another. Defamation can now also be suffered by a company and not just an individual.

So where can it be an issue in social media?

• Posting by you or on your behalf on social media sites: e.g. Twitter/Facebook/blog
• Posting by you or on your behalf on review sites: e.g. Tripadvisor
• Comment posting by third parties on your Facebook page or blog.

How do you manage it?

Understand it!

Make sure everyone posting content on social media about your business understands it. You need to have clear policies in place with employees and contractors to govern content creation and appropriate usage. You also need to have clear policies to govern how postings by third parties are to be managed.

• Have a clear understanding of how to react appropriately when a potential defamation situation arises. Have access to advisers that understand the medium. The critical time in defamation is the period immediately after the statement is made or the item published. Whether the matter ends up in litigation or not may depend on how this is handled.
• The crucial documents in a defamation case are not the complicated pleadings and affidavits when the matter is winding its way through the courts, the crucial items are the statements made and letters sent in the immediate aftermath. They will in all likelihood determine the ultimate outcome.
• How this is managed in the heat of the moment is critical – no amount of lawyers afterwards are going to be able to undo that and any amount of them are going to have an interest not to. And this is not the time to start developing new relationships, this is a time at which you will need someone who you trust and who understands your business and the medium you are working on to help you to prevent this from happening in the first place and to mitigate things as much as possible if it does happen.

Launching the legal Exocet missiles may sound impressive and may be all that some have to offer but unless the objectives to be achieved and the most appropriate means of doing so are clearly understood by all involved, it may, as in the case of the superinjunctions, be utterly counterproductive. Better avoided if possible.

Consequences for business:

• Damages – the largest ever award in an Irish court in defamation was €10M and the publication concerned was merely a press release sent by a private company rather than a publication by a major news outlet.
• Costs – significant unless nipped in the bud. There can be no incentive to minimize costs if there is no long term business relationship with the adviser.
• Impecuniosity of the other side – the target in a defamation case must be a mark – but the party bringing the action need not be – therefore successful businesses are exposed to risk and they cannot hope to recover costs of unsuccessful cases brought by those unable to pay.
• Insurance – check your policy of insurance to see what you are covered for. Some business policies cover it for the more traditional situations such as shop lifting when someone may claim they were defamed when accused of a criminal offence in a public place.

# 2. Employment Law

This is the critical area in which the practical management of your social media content will occur. If this is not managed properly and proactively there really is potential for disaster, but the good news is that it can be managed effectively and relatively easily with a bit of foresight and planning.

Issues:

• Clear agreements with employees setting agreed boundaries.
• Clear policies on content and usage integrated into agreements.
• Practical management of resources.
• Policies to protect against inappropriate behaviour by employees impacting on other employees – acceptable usage.

Clear agreements with employees setting boundaries:

The employment agreement with the employee who is creating social media content needs to address this aspect of the role specifically. It needs to define clearly what is and is not acceptable and consequences that will arise for failure to observe those standards.

• You do not want to have a situation where an employee runs amok online and you are left with both damage to your business and no clear remedy against your employee.
• When a problem arises is not the time to start thinking about how you might deal with the situation. Set the ground rules in advance and incorporate them into the contractual relationship to prevent this happening in the first place.

Policies on content and usage:

Your contract of employment is only going to be able to deal with things at a general level. The internal policies which govern your content creation are really going to define the nuts and bolts of what can and can’t be done. The policies need to be in clear straightforward language and tailored for the organisation. Cutting and pasting something is only going to be of limited value because it probably is not even going to be read.

The policy document needs to be one that your organisation really takes ownership of and reflects what actually goes on. Ideally it should be prepared in-house with some guidance and advice to ensure it covers all the necessary aspects. Some piece of legal boilerplate that no one understands or ever refers to is practically pointless. If anything does ever arise you are going to want to be able to refer to something that was actually used in practice.

Practical management of resources:

This is perhaps the most important common sense aspect – make sure you have control over your own social media. This does not mean you micro manage every aspect, precisely the point of everything we are talking about here is that you can’t and you shouldn’t. But you should have control over the infrastructure.

• You need to control what accounts are opened for your business and make sure that they are associated with your profile and that you are the administrator.
• On sites like Facebook a great deal of value can reside in the profile, i.e. the number of likes to a page or friends to an individual. If the practice evolves where the employee sets up the account and then leaves, this can cause enormous problems. If they leave in acrimonious circumstances these problems can be insurmountable.

We all know how inflexible Facebook is and how difficult/impossible it is to get any satisfaction from complaints. Therefore you must make sure you’ve got a handle on this. Again it should all form part of a coherent written resources policy.

Acceptable usage policy:

One aspect of your policy document is to provide a structure on your relationship with your employees, but how your employees conduct themselves towards one another is equally important and acceptable usage is an important part of this. The classic example of what needs to be covered here is the accessing and circulation of inappropriate content in the workplace. Failure to provide the appropriate structure may leave you liable; not to the employee responsible but from others in the organisation who are exposed to that employee’s unacceptable behaviour.

# 3. Privacy/Data Protection

This area warrants its own entirely separate guide (check back here soon) but you need to have it covered. Customer contacts and other details that you may be gathering for marketing purposes are personal data and have to be handled in accordance with the strict statutory regime. You must have a clear written policy in this area and it must be understood and followed. Particular care must be taken when data is being transferred abroad.

# 4. Third party agreements/Intellectual property

Again this subject warrants a whole guide in its own right but it is one to bear in mind when dealing with outside consultants. Similar considerations to employees arise in relation to securing control of the set up so that you are not held to ransom or left high and dry if there is a parting of the ways.

In the case of external consultants there is the additional issue of ensuring that you secure the intellectual property rights (copyright etc.) in anything created by them and this should be covered by the consultancy agreement. Anything created by employees will be deemed to belong to the employer’s business unless there is agreement to the contrary but this should be covered by the employment agreement in any event.

Final Thoughts

The one big takeaway from all of this is that while there are issues associated with effective implementation of social media that is no reason not to do it. You need to identify the risks and manage them to acceptable levels with effective systems. However, if this isn’t done in advance the potential for largely avoidable problems does exist.

Don’t let the first time you take the right legal advice be when you first encounter a problem as by that time it may well be far too late.

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There is what you want to be and then there is what you have to be. One of my clients knows he would be a great chairman but his business isn’t ready yet for him to step away from actively leading his company through its current growth stage. Another client tells me he hates doing his administrative tasks but there isn’t enough money to hire a much needed administrative assistant. Just these two stories are typical of so many small business owners who are using the CEO Mindset but have limitations regarding just how much they can act as the leaders and strategists they know they truly are.

Before we go any further, what is a CEO?

The role of CEO and small business owner parallel each other quite a bit. They both are responsible for:

• Setting the vision and tone of the whole company
• Designing the strategy of how the business will develop over time
• Seeking talent through hiring, outsourcing or collaborating with complementary professionals
• Keeping self and others accountable to the stated business goals
• Knowing “cash is king’ and keeping revenues are stable, growing and making a profit

As we take a closer look, it is clear that a CEO and a small business owner are more synonymous than we give them credit for.

Related post: What is a “Real” Business Owner Part 2

Signs when your small business isn’t ready for you to be CEO

In your head and heart, it is time for a more sophisticated role. However, there are warning signs to signal when to stay put in your current role.

You are feeling uncertain about how to be leader and manager for your business’ next stage

Your company, even when you are a sole trader, depends on your ability to manage yourself — monitoring your own emotional responses, developing confidence in your own authority, communicating effectively while integrating your work and personal life.

Inconsistent or lack of detailed knowledge of the company’s financials

This topic alone could be a stand-alone blog post but, simply put, a lack of a stable foundation, a shortfall of expected earnings or poor accounting can stifle business growth and keep you from stepping into the role of managing director.

There is no clear written plan shared with others

Your small business will never be ready for you to be the CEO if the plan is in your head. Without a clearly communicated and written plan shared with your staff, it is hard for you to focus on business development, attracting investors or increasing visibility through networking, speaking engagements or conferences and trade shows.

Lack of personnel

Sole traders already know that if they don’t do the work, it doesn’t get done. In addition, there are microenterprises that need everyone to do the work of product/ service development, marketing, customer service, administrative tasks and more. Controlling the pace of growth and weighing the quality of current opportunities will support a positive workplace and avoid adversely affecting stress levels.

If you are noticing these signs, it is time to stop, regroup and review. There are times when a small business must focus on the basics to stay viable while, at other times, there must be careful management to avoid growing too fast without the right supports in place. The review (which could include a SWOT analysis) spells out the current state of the business and what needs attention.

Related post: 10 Reasons Why Small Businesses Fail

When what you want to be and what you have to be are at odds

For many small businesses, there can be a combination of difficult external and internal circumstances slowing or stopping business growth. It is not unusual for small business owners to find themselves chafing at the thought that “this business could be so much more if I could (fill in the blank)” instead of ploughing through the everyday must-do’s. With some pragmatism, grit and perseverance, you can prepare your small business for the time when you can be CEO.

6 ways to prepare your business

# 1. Learn to manage yourself

Regardless if you are trying to stay afloat, rebuild your business or shepherd a big growth phase, the way you manage the emotional side of your business is a key factor. Not handling your stress level well can hurt your ability to analyse information, make decisions and act effectively. This also includes using good (and personalised) time management skills and avoiding procrastination.

# 2. Develop an informal or formal group of advisors

You can make yourself crazy going round and round trying to analyse choices, particularly when you don’t like any of your options. A formal or informal advisory group can help expand any possible tunnel vision, refer you to other resources or keep your spirits up.

# 3. Use a living business plan

Review your business plan on a quarterly or even month-to-month basis so you see developing problems earlier, identify the strengths of the business and make more pinpoint adaptations as needed.

# 4. Keep track of finances

When things are tight or in flux, it becomes more important to review where the revenue is coming from as well as the expenses. This includes tax planning, establishing (or maintaining) reserve capital and a line of credit.

# 5. Learn from more experienced business owners/ executives and develop new skills/ knowledge

While this might refer back to my recommendation regarding advisors, advice can come from veteran business people when you least expect it. Read books, listen to podcasts, watch videos or attend free or low-cost classes to fill in your skill gaps.

# 6. Identify what staffing needs you have and what you want them to do

Before you jump into the “I need to hire someone”, write down what you want this person to do, skills needed for the position and the ideal type of personality. It will help pre-qualify the type of talent that would fit in your small business. On the other hand, you might discover you already have the best candidate on staff and can delegate the work straightaway. The written exercise helps clarify what you are thinking as well as what you want.

It isn’t the end if your business isn’t ready for you to be CEO

As one of my clients is learning, you might be able to start separating yourself from being the number one subject matter expert but you may need to do it in stages. He gives some responsibilities to staff members, takes secondary roles on teams and advises project managers. He finds himself straddling the CEO role and the subject matter expert role as his business launches a product. He can see the projections that say this launch will be a winner but he still has to take things one day at at a time.

There are a myriad of reasons why your business may not be ready for you to be CEO.  It may even feel frustrating or worrisome but it is not forever. It is an opportunity to get those ducks in a row. Prepare yourself and your business so, when you do become CEO, it is smooth and logical.

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Since then telecommuting has grown 433 percent. Much of that growth came in the early years – the last big jump came from 2007 to 2008 – but the fact remains that more employees than ever are working outside the office. Chances are your small business employs workers who don’t even live in the same state. Yet they can be just as productive as, if not more productive than, in-house employees.

Anyone managing remote employees needs to understand that their needs are different than those of in-house employees. Remote employees enjoy a more flexible lifestyle and tend to take advantage. It’s not up to them to conform to the rules of an office in which they do not work. It’s up to the manager to ensure everyone is on the same page. That’s why these five crucial tips will come in handy for anyone managing remote employees.

# 1. Get them on Skype

It might not seem becoming to recommend one specific communications tool, since there are dozens upon dozens of them. But from experience, Skype is the way to go for communicating with remote employees. Just think about the factors you desire in an instant messaging platform:

• Dedicated to work (not shared with friends and family)
• Ability to quickly share files
• Video chat capabilities
• Group chat support
• A record of archived chats

Go through every major instant messaging platform, and only Skype really fits the bill for all points. Google Talk comes close, but too often people keep both professional and personal contacts on their lists. That’s the easiest way to become distracted and miss important points.

The downside is that while Google Talk and all of its features are free, Skype Premium, which adds group video chat and other features, does cost money. But you’re managing a business, right? And isn’t a communications platform important to your business? You can justify the small expenditure with the large benefits.

# 2. Set regular check-in times

Perhaps the most important reality to keep in mind when managing remote employees: they don’t act like traditional office employees. To manage them in the same way as office employees is to fail at managing remote employees.

Managers must understand that remote employees tend to spread out their days. They will take mid-day breaks to run errands. They will move to the couch when the desk chair becomes uncomfortable. Sometimes they’ll take off for hours during the day and make up that time at night. To tell them they can’t is to misunderstand their situations.

Yet as managers, we need to stay in contact with employees near and far. So how can we adapt our styles to fit those of our remote employees? By setting regular check-in times. It doesn’t have to be for long, either; just a couple of minutes per day will do. It also doesn’t have to be at a regular time. “Regular check ins” means regular on a daily or weekly basis.

Meeting regularly might not cause any great improvements in workflow. What it will do is prevent slip-ups. The biggest changes are the ones we don’t see. Setting up regular check-ins with remote employees, at a time that works for both manager and employee, will help keep everything above board.

# 3. Use a collaborative task manager

When you manage employees in an office, task management can take many forms. It can come from an email, from task management software, or even a memo dropped onto the employee’s desk. Because you know where they’ll be, it’s easy to follow up and follow through. That becomes a bit more difficult with remote employees. Managers need a set way to assign and check in on tasks.

When I started working from home, my boss used 37 Signals’ Basecamp to assign tasks. It worked well enough. I could view my tasks, and then upload the completed work. Yet there was always something clunky about Basecamp that didn’t work for me. It might work for many managers out there, and for them I encourage it. But there are alternatives.

Sensing a need in the market, many developers have created collaborative task managers to help when managing remote employees. There are intricate solutions, such as Producteev, that can help managers who oversee a dozen or more employees. For smaller projects, something like Toodledo can provide minimalist task management.

# 4. Ensure mobile compatibility

Most small businesses cannot afford to supply their employees with smartphones. The service and upkeep costs are just too high. Yet many, if not most, employees of small businesses will carry smartphones of their own. Almost all remote employees will have a smartphone; it’s tough to run errands mid-day without one. To the manager, this means one thing: ensure compatibility.

That isn’t to say that the manager should ensure all employees are using Android, or all employees are using iPhone (or even BlackBerry). That’s a bit unrealistic today. I use the Google Nexus 4 on T-Mobile, while some of my employees use the iPhone on Verizon or the Samsung Galaxy S3 on AT&T. That will never change. What we can do is use software with cross-platform compatibility.

We can circle right back to Skype with this. It is available on all smartphone platforms (coming soon to BlackBerry, at least). We can communicate that way, whether we’re at our computers or on our mobile phones. The same goes for task managers like Producteev. We can share notes with Evernote. The key is ensuring that all software we use, we can use on any device. It helps keep all employees and managers on the same page, since we have all relevant information with us at all times.

# 5. Arrange for in-person visits

For the most part, companies have accepted remote employees. They work one place, we work another, and with the power of communications tools we get the job done. But anyone who has managed remote employees or who has worked as a remote employee knows that the lack of personal connection can be grueling.

Employees sit at home all day, escaping to coffee shops for a touch of human connection. They love the flexibility and freedom of remote employment, but still need people in their lives. Managers type to remote employees and sometimes see their faces in video chat, but still yearn for that personal connection, as they do with all employees.

The solution – one I’ve experienced first hand with great success – is to convince the big boss to sponsor trips for remote employees. Get them a flight and a place to stay, and let them spend a week a year in the office, interacting with the regular employees. This might not be feasible for, or even attractive to, everyone. But for those willing, it can provide insights that you just can’t get over an internet connection.

Are you a remote employee? Do you manage a team that includes remote employees? What are some things I missed that you consider best practices?

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Ash Maurya’s book ‘Running Lean‘ will help you to manage the biggest challenge facing any startup -  to avoid product failure.  Eric Ries, author of The Lean Startup praises Running Lean for providing ‘practical guidance on how to put Lean Startup principles into practice’ describing it as a ‘handbook for practicing entrepreneurs who want to increase their odds of success’. In this post, I will highlight some key learning points from a workshop that I recently delivered with a group of very early stage startup promoters on the ‘Lean Canvas‘.

# 1. You don’t need a Business Plan

“What separates successful startups from unsuccessful ones is not necessarily the fact that successful startups begin with a better initial plan (or Plan A) but rather that they find a plan that works before running out of resources”. Ash Maurya– Running Lean: Iterate from Plan A to a Plan that Works.

Putting your thoughts down on paper is a wonderful and valuable exercise. But at an early stage of a business, a formal business plan document is not required. Traditionally, business plans have been used to document Plan A. But few people take the time to actually read business plans. More importantly, since many Plan As are likely to be proven wrong, spending several weeks writing a 60-page business plan largely built on untested hypotheses is a form of waste.

[At the appropriate juncture, generally when external investment is being sought, you will need a business plan with professional financial projections. In Running Lean, Maurya identifies the three stages of a startup. For the purposes of this post, I am focusing on Stage 1 which applies to early stage startups and is described as Problem/Solution Fit].

Instead of a business plan, Ash Maurya recommends using a one-page business model format called Lean Canvas – which can be completed in twenty minutes to allow you to communicate your business model with internal and external stakeholders. It captures the same core elements you find on a business plan, but because it fits on one page, it’s a lot more concise, portable and readable.

It is hugely important to think about and document your hypotheses or assumptions as to what will make your business a success. Completing your Lean Canvas provides a systematic structure to begin this process but it is only the start.

1. Document your Plan A (s)
2. Identify the Riskiest Parts of your Plan (s)
3. Systematically test your Plan

You will notice that you can have more than one plan or canvas. Most startups will identify several potential customer groups possibly requiring changes to specific elements of your business model. A few other points to note:

# 3. Life’s too short to build something that nobody wants

A central theme of Running Lean is that a successful business must identify your customer’s ‘must-solve’ problems and that you must iterate your solution whilst engaging with customers, valuing their feedback both what they say and what they do.

# 4. Draw a line in the sand

Creating your first Lean Canvas draws a line in the sand. The next step is to share your Lean Canvas with trusted mentors and business advisors. It is important to identify the riskiest parts of your plan. Discussing your Canvas will also help clarify the next steps to be taken – which should be to test your plan.

Conclusion

With so many balls in the air, it can be very easy for startup promoters to lose focus, get distracted or indeed not know if they are making real progress until it is too late. A key principle of Lean Startup is ‘Validated Learning’ which means that the job of the startup promoter is to learn how to build their business not just build a product. By defining a systematic process which includes the Lean Canvas, the Running Lean methodology provides a superb roadmap to undertake this learning and thereby increase the odds of success.

This post has not addressed each of the 9 Building Blocks of the Lean Canvas. For anyone interested in that level of detail, I highly recommend the FREE 7-Day Lean Canvas Course of video lessons by Ash Maurya.

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Henrik Fisker

Henrik Fisker prides himself in designing beautiful cars.  The former designer at BMW and Aston Martin founded Fisker Automotive in 2007. The first and only model Fisker produced was the high-style Karma, a $100,000-plus plug-in hybrid luxury car with a backup gasoline engine like the Chevy Volt.

While the look of the car is sensational, most other aspects have been a disaster.. For example, Karma was recalled for a potential cooling fan problem that could lead to a fire. In fact, some Karmas caught fire even while parked. Fisker’s battery supplier, A123, filed for bankruptcy.  Another nail in the coffin was when Consumer Reports gave the car a failing grade, indicating “The car didn’t always run.  I cannot recall a vehicle we ever tested that had this many issues, or had to be flat-bedded away.”

Only about 2,500 Karmas have been made, and production was suspended several months ago. Fisker recently quit, and most employees were terminated as the company prepares to file for bankruptcy protection.

Henry Ford

This reminds me of another, more famous auto-guy who too was seduced by his strength; Henry Ford.  He was the father of high-efficiency, standardized, mass-production manufacturing; producing only one model with each car being exactly alike. This enabled Ford to get the cost of a car down to the point that the average family could afford one.  The idea was right, but unfortunately, Ford was completely insensitive to other aspects of his business.

With time, customers became interested in different styles and models, but Ford struck to his standardized Model T (e.g., it only came in black!).  When he finally decided to update the original design, and produce the Model A, he ignored his customers and shut down Ford production for 17 months while the manufacturing changes were made.  The fast emerging competitor, General Motors, was making annual styling changes on the fly, and quickly passed Ford in annual sales.

Ron Johnson

While not in the same industry, Ron Johnson at JC Penny is another robust example.  Coming into the CEO job 18 months ago, he was very proud of inventing and making very successful the Apple retail stores.  While the approach of never offering any “deals” while selling high-end, premium priced iMacs, iPads, and iPhones worked well with the cutting edge technology products Apple was generating, the super-price-conscious JC Penny consumers fully rejected the “no promotions or reduced-price sales” approach which Johnson implemented within his first few months of arriving at JC Penny.

He completely ignored the notion of learning about the low-end department store market and the likes and dislikes of Penny’s customers; he just immediately implemented what he did at Apple, generating a 32% decline in sales and 63% decline in the stock price. A few weeks ago, Johnson was fired.

So…What are the characteristics that can enable a leader to avoid the kinds of problems we see in the three individuals noted above?  Here are my favorites and they are all equally important:

• Paranoia:  When I was working for Bill Gates in the 1990’s and the PC business was booming, he only wanted to talk about problems and how to quickly fix them and opportunities that could bury us if we didn’t quickly seize them.  That mindset is powerful.  With each new situation, the courageous leader clears their mind of all preliminary ideas, and starts sorting things out.
• Curiosity: All aspects of what you are responsible for deserve constant probing for understanding, enabling you to lead the charge in tackling problems and opportunities.  Avoid the trap of just assuming things are fine unless someone requests your involvement.
• Humility:  No question is a dumb question.  Often individuals get promoted and mistakenly think that people at that level should know it all and shouldn’t have to ask questions.    You need to admit what you don’t know and continually work to learn more about all aspects of your responsibilities.
• Customer Focus:  The customer is truly the king.  As you continually probe to figure out how to become more effective and efficient in serving the customer, don’t let your particular talents or past experiences bias your learning.

Leadership is both fun and rewarding, especially if you religiously put these characteristics into practice.

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There are some instances where an attorney would be needed:-

Becoming a corporation

Certain types of business incorporation does not create a need for a lawyer. Forming an LLC or going into partnership is a ‘do it yourself’ situation. Once you move into a larger partnership, such as adding shareholders and needing a board – you’ll need an attorney. Many people have run into serious problems when corporation paperwork and tax requirements became overwhelming. A business attorney can help during this stage of growth.

Lawsuits and litigation

While no business owner wants to face litigation, sooner or later a lawsuit is likely to come about. These litigations can be from a former employee, a customer, or even the government. There’s no lack of avenues where a lawsuit can come from. Representing yourself or your business is not a good idea and can result in staggering loss.

Filing for a patent

Patents are frustrating. The time it takes to have a patent registered and approved can span years. Patents may or may not give your company an edge over competitors. Unless you are in an industry where patents are very important, you may want to reconsider this process. If you find that you do need to file for a patent, a lawyer can make the process easier. It is still expensive and time consuming, but a lawyer will help you navigate the waters.

Selling your business (or buying one)

Selling the business you have worked so hard to build is both exciting and terrifying. There are many contracts you must sign and negotiations to understand. A business lawyer during a business sale is almost mandatory to get the best deal.

If you are buying a business, retaining an attorney is best. Your lawyer will read contracts, negotiate terms of sale, and help you avoid purchasing a business that is crippled by loss. Unless your business is to turn around floundering companies, your lawyer can help you back out if the great deal you’ve found turns out to be too good to be true.

Lawyers are often portrayed as sharks, but business lawyers can help you avoid the pitfalls of bad business deals. Attorneys know the laws that pertain to your business, small or large. With their help you can build or expand your small business without becoming entangled in legal disputes you don’t understand.

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Here are a few times when workers should seek out their company’s HR department, lessening the chances for a conflict that can be bad for both the employee and the employer:

Benefits information

Especially when employees are first hired or right after earning a promotion that comes with extra perks, it is wise for them to check in with their HR department to get full details on the benefits that come with the job. An HR representative can explain things like insurance and employee discounts, and help workers file any paperwork that’s needed.

Clarification of company policies

For most companies, policies that affect workers are either written or vetted by the human resources department, and are always administered by them. If employees need clarification on policies such as trading in unused sick time for vacation days or taking advantage of company wellness or discount programs, HR can help walk the individual through them.

A change in personal status

Having a baby? Getting married and need to change a tax withholding? Need emergency time off or reduced hours, or need to take time under the Family and Medical Leave Act? Human resources should be a worker’s first stop. A representative can walk him or her through filling out forms and getting leave approved.

Advancement opportunities

While a human resources rep can’t make the decision to give employees a promotion or raise, he or she can talk to the worker about what opportunities the company offers for advancement. This also includes educational opportunities or reimbursement, so the employee can get the training they need to succeed in their career.

Another great way for employees to use their HR department to their advantage is to keep them updated with their successes and strengths within the company. This can turn the worker’s rep into an advocate for them when the time comes to hand out promotions or raises.

Dispute resolution

Finally, one’s human resources department can help them if they have a problem with a manager or co-worker. Even if the individual chooses not to file a formal complaint, it’s part of the HR rep’s job to provide a professional ear for the employee while the individual vents about the problem. He or she can also give the worker suggestions for how to handle disputes before they escalate, or give the individual recommendations for how to proceed if a formal complaint is warranted.

A worker’s human resources department is in a good position to advise the individual, because they know the atmosphere in that person’s workplace — such as what their manager is like, and what issues their predecessor had in the worker’s position.

While employees may have been looking at HR as mediators in a dispute or the bearers of red tape between themselves and their benefits, the truth is that a good human resources department looks out for employees, as well as the company.

By getting a worker’s HR rep on their side and keeping him or her updated on the progress or lack thereof involving a situation, employees can get a boost in their career when advancement time comes.

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Investor privacy

Nominee directors are a huge boon for investor privacy. Many jurisdictions require the personal details of the company director to be included on a public register. This is an issue that has come under pressure from the OECD and other international tax authorities to make this information public, in an effort to combat tax evasion. Thus, a nominee director offers an extra degree of asset protection, as the nominee director’s details appear on the jurisdiction’s company registry instead of any of the investors.

Meet statutory requirements about residency

A nominee director may be required to meet certain statutory requirements. Singapore and Australia, for example, both require newly registered companies to appoint a resident director who has been residing in the country in which the offshore company is formed for a certain amount of time. Some jurisdictions, like Dubai, require the director to be a local citizen. This requirement can be troublesome for investors looking to take advantage of a foreign countries company law but the requirement can be met through the use of a nominee director.

A nominee director who is a resident/citizen of the jurisdiction is fully capable of meeting this statutory requirement on behalf of the company. For entrepreneurs looking to manage their business from their own country, a nominee director would allow them to meet company law requirements while still being able to live where they choose.

Logistical benefits

Nominee directors can also be immensely beneficial for logistical reasons. Offshore companies often require the opening of a corporate bank account to complete company incorporation and the corporate bank account applications often require the director of the company to meet with the bank in person. A nominee director can save the investors the time and money required to travel to meet the bank by meeting with the bank on their behalf.

The nominated director may also complete other legal requirements that may arise, such as the need to register with certain government organizations, the need to register for taxes, and the need to obtain special licenses.  Thus, a nominee director is capable of saving the investors significant amounts of money despite having to pay a fee for the nominee director’s services.

The risks

Hiring a nominee director is not without risk. While a nominee director should act in a passive manner, with all business decisions being deferred to the investors, the nominee director is bestowed with power in the company. The nominee director is capable of making strategic decisions related to the operations and management of the company and may also act on behalf of the company with clients, suppliers and governments without the expressed consent of the investors.

Thus, it is very important that only a professional corporate services firm with available references be hired to provide a nominee director.  Consideration can be given to including special clauses in the contract to stipulate specific guidelines regarding decision-making responsibilities.  This can help to ensure that the nominee director fulfills their role effectively and the company achieves the desired objectives for its investors.

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Many people see a successful business with an interesting idea and think that was theirs. Well, here is the reality – while you may think you have a great, breakthrough idea that can revolutionize the business there are probably ten other people thinking along similar lines. It’s the one who can execute it that comes out as the winner.

So, how do you make sure your idea morphs into a successful business and doesn’t end up collecting dust on the shelf? Here are few tips.

Take an iterative approach

For an idea to get anywhere you first have to start acting on it. Most people wait till they have thought about all possibilities and have a complete plan in place before taking any action. This is a wrong approach. The best thing to do is to start taking baby steps and develop a prototype. Even if it is a limited version of the final product you have in mind it is important that you develop it and put it out for people to review. This not only helps you test your idea with others, but it also limits your losses if your potential customers do not agree with your thinking. Only by taking an iterative approach of develop, publish, test and improve will you be able to build the product and business that can succeed in the market.

Focus

At any given time people probably have five different ideas floating in their head. There is no way you can turn them all into a successful business. I have seen people who jump from idea to idea without turning a single one into a viable business. The best approach is to pick one and do it. Remember, it doesn’t get done till you do it.

Don’t be afraid to fail

This is probably the single most reason why ideas don’t get translated into a successful business. People are afraid of taking a first step due to fear of failure. They keep thinking about the consequences of failure and refrain from taking that first step. As we all know those who don’t start cannot finish. You have to embrace the failure and learn from it. That is why the suggestion I made earlier about starting small and taking iterative approach is so important.

What do you think? Any other ideas to turn those ideas into a successful business?

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The IT sector in Ireland is booming. The world’s largest and most successful companies are located here and our local Technology companies are succeeding on the international stage. There are lots of available IT roles for the right people. Yet, emigration from Ireland continues at unprecedented recent levels. 

Why is Ireland successful in attracting IT companies?

Google Ireland’s headquarters in Dublin [Image: businessetc.thejournal.ie]

Some of the reasons for Ireland’s success in attracting the world’s best IT companies are:

• Taxation: Right now, our low corporation tax is a significant (but not the only) factor in attracting IT companies.
• English speaking: We’re English speaking and English is the language of business.
• Talent: There is an existing pool of talent. Over the years, companies like Google and Microsoft have already attracted a large pool of talented people, and this talent has evolved.
• Pro-business: We’re pro-business. It’s easy to set up here and we’ve built a top class support base.
• Momentum: We have momentum. Ireland has put a lot of work into developing our IT ecosystem. Success breeds success and having great companies already based here, makes it easier to attract new companies.

Recruitment is the number 1 challenge facing the IT Sector in Ireland

There may be a pre-existing pool of talent in Ireland, but as more and more companies locate here, more skilled IT people will be required.

Some of the world’s top IT companies have now gotten together to launch “Make IT in Ireland”.

Names like, Google, Intel, Microsoft, Facebook, Twitter, PayPal, Oracle and Symantec have joined forces in a collective attempt to solve their Irish recruitment problems.

At a recent IT event I attended in Cork city, it was clear that recruitment was also a big problem for companies down there. Add to this, that Cork doesn’t have the international recognition of Dublin. It’s an even bigger challenge to get IT professionals to consider moving there.

During this event it was said to me that unless this company can find the staff they require, it may even have to consider re-locating their Irish operation. Make no mistake, that would be a disaster for Ireland.

How does Ireland stay ahead?

We need to meet this challenge head on, and put both short-term and longer-term strategies in place to solve the IT recruitment problem.

• Short-term:  Ireland needs to focus more effort on attracting IT professionals (and their families).  It’s worth remembering that when people are considering re-locating, their decision will be based on a very different set of factors: How easy it is to move my family there? Where will we live? What are the schools like? What type of lifestyle can we look forward to? Etc. Also, our immigration system needs to be investigated and reformed so that it becomes easy for people with required skills, and their families to move here.
• Long-term: Integrate the IT sector into our education system. Ultimately, we also want to develop home-grown talent. Putting a greater emphasis on subjects such as science, technology, engineering and mathematics is a good start, but I believe we need to go even further!

Use the existing talent to create a new generation of Irish IT experts

It’s now accepted that it takes 10,000 hours to create an expert:

1. We need to allow our technology and related sectors to help co-create our education curriculum and co-educate our young people.
2. And I’m not just talking about 3^rd level here, I would include 2^nd level and primary level education too.
3. This would give our young people the best possible opportunity, by introducing them to and educating them around technology, at a much earlier age.

CoderDojo

CoderDojo Founder, James Welton was recently named on the Forbes, “30 under 30 Social Entrepreneurs“

CoderDojo, an Irish not-for-profit organisation founded by James Whelton and Bill Liao, is a brilliant example of what we should be doing more of!

“Young people learn how to code, develop websites, apps, programs, games and more. Dojos are set up, run by and taught at by volunteers. Dojos organise tours of technology companies, bring in guest speakers to talk about their career and what they do, and organise events. In addition to learning to code, members meet like minded people, show off what they’ve been working on and so on. CoderDojo makes development and learning to code a fun, sociable, kick ass experience.” 

Let’s continue to attach the world’s best technology companies,  but also aim to produce some of the world’s best technology graduates. Wouldn’t that be a potent combination?

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