Wednesday, September 29, 2010

Passing the Torch (and trying hard to let go of the reins...)

Hi my name is Brad Magrath, and I am one of the founder shareholders of Mobile Transactions with my brother Brett. This is my first blog ever anywhere so I thought I would share some of my thoughts and experiences that every entrepreneur will probably go through as they ramp and scale their business: bringing in and retaining new skilled people, and empowering and trusting them to take the business to new heights.

Having two teenage daughters of my own I certainly relate to this story as told to be by a mate: When his daughter was 22 she was reversing out of his drive way in her new car and she crashed into the gate. She jumped out the car in tears and distraught and ran towards him. He opened his arms to console her when she ran straight into her boyfriend (now husband) arms. He just stood there in shock and still is not sure who was more upset – him or his daughter. I guess the moral is everyone has a time and place of influence and time stands still for no one. As a founder of a business getting your head around bringing in new managers to manage yourbusiness, is certainly an interesting and challenging concept.

Entrepreneurs by their very nature are passionate and committed. Certainly my brother and I have always been very passionate about Mobile Transactions. Similar to the cartoon TV show “Pinky and the Brain” who are lab rats who wake every day with one mission: World Domination, we wanted to create an awesome business and one that would scale across Africa. An early concern was how we would create a culture and organization that could get and keep the very best people. The nature of our business: Mobile Payments has both commercial and social impacts, has in many ways allowed us to be able to successfully do that. No mean feat having our first operations in Lusaka, Zambia – not a hot bed of world best recruiting talent.

As a company we have transitioned in highly skilled, qualified and experienced new staff: CEO, CFO as well as over 5 senior management staff and as founders we have realigned our roles as part of this team. Was it easy, absolutely not. Could it have been easier, I am not sure. In many ways we did a lot of things right and we actively sought to bring in the new skills but the reality is as strong willed individuals in an emotional hot bed even with the best intentions you can expect fireworks and we certainly had them. As we went through the mincer we certainly had some blood on the meeting room table, most of it constructive conflict but at times just conflict. In hindsight being brutally honest with myself I probably had visions of being a benevolent dictator: a democracy when I say so. Equally new management I am sure would equally face up to mistakes made during this time.

Some of the outcomes of this process we took on have been a far more focused, accountable and productive team. Incidentally over the 9 months we have been in this process the business has grown over 950% with platform revenue in September 2010 of over $2 million for that month.

Pretty staggering growth and born mostly out of this transition – I guess a great product helps but getting the skills and management to drive the business was fundamental.

Having outlined some of the issues, I think the following points contributed us going through this and coming out a stronger performing business with more capacity to scale. Again these are just lessons we learnt so take then with a pinch of salt when reviewing other businesses.

Trust, integrity, egos at the door
Even when heads were clashing there was an absolute trust in the integrity of all players round the table, and that differences aside everyone had the business best interest at heart. Also nearly every manager has filled numerous positions and job roles as required.

When things are not yet aligned this is a key factor

Coming from a team sport background you always get an understanding of the person next to you once you have won and lost together. It tells you a lot about them. I can remember Mike, now our CEO and fully fledged partner taking Brett and I out for a first strategic meeting (with us maintaining we were too busy for it) and then sitting there, arms folded behind my head thinking: OK, Mr. Oxford MBA what have you got to teach me. Needless to say we have come a long way a year down the track and have history to fall back.

Understanding Cultures
With a management team that has consisted of people from Zambia, South Africa, Canada, USA, UK, India, Polish and now we are adding Kenya and Nigeria it took us awhile to get to grips with the dynamics. We are not there yet but there is certainly more understanding - if the United Nations ever need help we can add some insights.

Make a plan and get things done. As a start up that has to be a call to arms and we have adopted it. It does mean feet get stamped on and ego’s bruised but it is critical that while defined roles and responsibilities are important and have value, sometimes stuff just has to get done and the closest person is often the best.

Mistakes happen, deal with it. Make a plan. There is no value in yes men or people who think just like you.

The first time I did not get my way, and I guess even now when I do not, the person standing in my way had best be able to stand their ground. This business means a lot to me and I certainly start every discussion thinking I am right. We have been fortunate to have solid individuals and professionals who have backed themselves and their role in the business. You just do not need to know everything that is happening every day.

This might sound incredibly obvious but for nearly two years we had two employees, the other one being family. Fast forward to this agriculture voucher season and Hans joining the team and working with Graham, employing 14 new short term staff, creating plans and budgets and then most important implementing an awesome project that generates over 50 new agents and $1.6 million revenue with little or no input from you, and certainly no control of the process by you. I have needed at times to remind myself to step back and not jump in. Trust their and Mike's judgement and focus on my job: selling. Once you get your head around it and just let go, it makes a difference.

Pig and Chicken
An oft quoted role in our business is that when you sit and have bacon and eggs for breakfast – the chicken is involved but the pig is committed. We like people in Mobile Transactions to be able to say “oink “. Certainly staff at all levels have put in sweat and long hours to show commitment. As a company we have started to roll out share options, cash incentives at a senior level and moving to the 2011 we will be extending various incentive plans across our staff network. Commitment works both ways.

Manage by numbers
If an entrepreneur does read this then this is the only paragraph of the whole thing worth remembering. Once we recruited Dave as our CFO and he got on top of the numbers and we identified our key value drivers and he was able to give us weekly up to date dashboards of our financial metrics around these same drivers: bam. Every dynamic around the team changed. Meetings stopped being about opinions, and who could voice their opinion loudest or longest but became fact based. The numbers were there and they were indisputable – everything started to flow and decision making was easier and lots of bottlenecks removed. If you want to make changes like these get on top of your real value drivers and measure them to the nth degree.

Celebrate victories
Something we have not yet got right, but when you are in dog fight you cannot celebrate false dawns but saying that we work hard, are making progress but seem not to take stock of the wins. The reality is this team has grown nearly 1,000 % in 9 months. It is normally only when you tell people our story that you take a moment to reflect on the progress. I think we also know what mistakes we make and how we could have done things so much better

Next Steps
As a senior team, led by Mike we are aware of some key challenges we will need to address going forward.

We are confident that this is the team that can scale regionally but are also aware that as and when we grow each and every senior person has no claim to a chair and as we grow and attract potential new investors change dynamics at all levels of the company remain possible.

More importantly in the short term we have some key management positions that are at key points in their careers. We will go to the plate to keep them but these are not done deals in any way.

To date we have not yet shown an ability to advance our Zambian staff up through the ranks. We have identified our Next Generation of Zambian Managers Claudius, Memory, Teddy, Charles and Agents like Michael and Thersford and others will be given opportunities but it is an important that both they and us as a company step up to get them to a level they have shown glimpses of but not yet achieved.

We are also setting up an independent and professional advisory board. It is important we know what we do not know and where we are short. Corporate Governance, investor readiness etc are all good buzz words but are also things we want to engrain in our culture through good advisors, while remembering that these can be implemented and in no way dilute our work culture and need to remain a cutting edge start up.

Well I have rambled on for 4 pages so if anyone has managed to wade through the whole thing I finish with what I said to Mike, our CEO on his handover. We got the business to $ 4 million; you and the team have to take it to $ 40 million. I look forward to supporting him every step of the way.



1 comment:

  1. You are a really great writer and boss Brad! You forgot to mention one really important thing, but I guess you were just being humble.

    This is a really tough working environment, people are pushed to their limits daily, there is a lot or responsibility and pressure and people could crack under it. One of the biggest and most 'unnoticed' things that Brad does is build everyone on the team up so they can do their best under any circumstances. When you feel like you are an important part of a successful company, you are able to withstand almost anything and still do the best job possible. Every member of a team needs 3 things:
    1. To be loved
    2. To feel like they belong
    3. To feel successful

    Brad has done a great job as not just the brains of MTZL but also the 'heart'.