#145 | Mastering Leadership and Innovation: Insights from Tech Entrepreneur Jordan Green AM

Jordan Green AM is addicted to applying bleeding edge technology to solve real world problems, more than 40 years in strategic governance roles and driven to discover disruptive business models. Jordan fosters solutions that change people’s lives. 

As engineer, executive, founder, director and investor for over 4 decades Jordan has helped start, build and grow technology-based ventures in Australia, Europe, Asia and the USA. 

We cover how embracing different perspectives can transform team dynamics, the risks of entrepreneurship, and integrity in founder-investor relationships. We challenge the modern narrative of entrepreneurship and venture into the world of angel investing. Governance and board dynamics also take center stage. 

In this episode, we discuss:

• 0:00 Collaborative Leadership in Tech Ventures
• 9:07 Founders' Guide to Team Values
• 16:16 Investment and Leadership in Tech
• 26:37 Angel Investing and Founder Ambition
• 31:17 Investing in Startup Success
• 36:13 Business Returns and Governance Options
• 42:12 Director Pay and Board Structure
• 52:53 Effective Board Governance and Strategy Integration
• 1:00:13 Consulting and Strategy Implementation Challenges
• 1:14:16 Navigating Challenges in Small Business
• and more!

Learn more about the 2024 upcoming awards and register here: https://www.pearcey.org.au/community/event-rsvp/?event_id=55

To connect with Jordan: 

https://www.linkedin.com/in/jordangreen/

https://www.linkedin.com/company/axletree-capital/

https://www.linkedin.com/company/melbourneangels/

https://www.linkedin.com/company/pearcey-foundation/

Transcript

Collaborative Leadership in Tech Ventures

Fatimah Abbouchi 0:00

You're listening to Agile Ideas, the podcast hosted by Fatima Rabouchi. For anyone listening out there not having a good day, please know there is help out there. Hi everyone and welcome back to another episode of Agile Ideas. I'm Fatima, CEO at AMO, Mental Health Ambassador and your host. Joining me on today's podcast is Jordan Green AM.

Fatimah Abbouchi 0:27

Jordan has spent a lifetime collaborating to change the world. He's addicted to applying leading-edge technology to solve real world problems and has more than 40 years in strategic governance roles and driven to discover disruptive business models. Jordan fosters solutions that change people's lives. He remains excited and engaged, using his unusual skills to provide thought leadership that helps others understand their potential and to see the opportunities for positive change. As an engineer, executive, founder, director and investor for over four decades, Jordan has helped start, build and grow technology-based ventures in Australia, Europe, Asia and the US of A, Combining his own learning with the wisdom of colleagues from all over the world.

Fatimah Abbouchi 1:13

Jordan has helped guide thousands of aspiring investors and entrepreneurs on four continents and quite a few islands too. His experience is across large infrastructure projects, aerospace and defence programs, innovation promotion initiatives and investment development, including being involved in policy development, program design delivery and performance assessment. He's internationally sought after as a consultant in early stage ecosystems. Jordan is a Silicon Valley software veteran, a co-founder of a top performing VC fund in Australia, founder of the Australian organised Angel Investor Community Group, and also the founder and president of Emeritus of Melbourne Angels, one of the longest running and most active startup investor groups in the country. In 2024, Jordan was the first person ever to be inducted into the Order of Australia for service to Angel Investing and one of only a handful of recognised people in a similar way anywhere in the world. Please join me in welcoming Jordan to the show. Jordan, thank you for joining us today.

Jordan Green 2:19

My pleasure to be here, Fatima pleasure to be here, fatima.

Fatimah Abbouchi 2:26

I'm very appreciative of Lisa introducing us, because you and I've obviously met before and you were full of knowledge, so I'm sure everyone listening today is going to get a lot of that value from the same value that I got from the first time we met. So yeah, let's get straight into it. I shared a bit more about all of the things that you have achieved in your career over the last 40 years, but if you had to sort of sum up you know where you are, this part of your career what would you say and tell us a little bit about how you got there?

Jordan Green 2:53

Sure, and I'll start by saying it sounds weird when I hear you say 40 years. It's like that sounds like a long time when you say it, but it's gone very quickly. Like a long time when you say it, but it's gone very quickly, which I think just means I've been busy the whole time. So I mean, I know you read out all the details but but as a quick summary, I I in a lot of ways I started when I was a teenager because I was very involved in leadership and youth movements and community activities. So in terms of being someone who got out there and did things and started things and grew groups, I've been very involved since I was very young. I guess I started with Cubs and Scouts and all that sort of stuff and to be honest, that really did make a difference because all those experiences taught me a whole bunch of skills at a very early age. They taught me about leadership. They taught me that if you want to start something, you have to do the work. If you want to grow a group, there have to be the one or two or four or five people who sit at the middle and are willing to do the work over a protracted period, whether it's a social group or a sports club or a business. And then I did my electronics engineering, which again gave me a structured way of thinking that has stuck with me throughout everything that I do and when I go and give. For instance, I get asked to give guest lectures to graduating engineering students.

Jordan Green 4:27

One of the things I focus on for them is to value the way that we think, the way we're taught to think, the way we're taught to approach a problem, pull it apart, put it back together, solve bits and pieces, look for other ways to do things. It's different. It's a different way of thinking to the way accountants are taught. It's a different way of thinking to the way accountants are taught. It's a different way of thinking to the way doctors are taught. It's a very different way of thinking to the way lawyers are taught, or plumbers, or carpenters, or hairdressers. Everybody has a different approach, but the engineering approach is a particular one and, of course, in the modern world, engineering thinking is what underpins the whole of the tech industry. So sometimes people say to me oh, but isn't that normal? I'm going well? No, but it's been very successful and that's why you should value it. It's not one and only. There is value in diversity of how we think, as in every other axis of diversity. So when you put a team together, you want to have different people and you want to listen to the different ideas and the different approaches that people have to how they assess a problem or deal with a situation or suggest a solution or see the future.

Jordan Green 5:41

And I guess what I'm saying is I learned that very young and I've done that all throughout. So when I've lived overseas, I really embraced the communities and the cultures that I lived in, and it's never about better or worse, good or bad. I you know you asked me before all this that you're going to ask me a question in the beginning about some best or greatest or most, and I don't respond to those things. Well, because that's not how I engage with the world. I don't think I'm better than you, or over there she's the best or he's the most inspirational. I think we all matter and we all count, and if we so, the fact that today there's a great big wave of diversity and inclusion to address the social inequities, I think that's fantastic. It's a little alien to me, in a way of thinking, because I have never had those exclusions. But I'm very glad that it's happening because I do think it's absolutely, not only ethically and morally, but I think pragmatically, it's the right way for us all to live.

Jordan Green 6:54

And so I guess part of what I'm saying is everything that I've done has always been collaboration.

Jordan Green 6:58

No one really does anything on their own.

Jordan Green 7:01

Sometimes you have to get out in front, sometimes you have to push from behind, sometimes you have to get out in front, sometimes you have to push from behind, sometimes you have to have the patience to guide from the sidelines. And a lot of that deciding which one to do when does come from experience and so, yeah, so I moved on. I used to say I spent the first half of my life sort of building and creating business and new opportunities and new technologies, and the second half of my life guiding others through investment and advice and other things in doing that. Now that I listen to the way you started, the second half is probably getting to be a little bit longer than half. Yeah, so I'm still involved with that. I still talk to lots of young people who are eager to think about their futures, speak to lots of people of all ages who want to start new ventures social ventures, business ventures, and I'm still looking at, I'm still embarking on new adventures myself and I'm still looking at, I'm still embarking on new adventures myself.

Fatimah Abbouchi 8:13

It's a really great career journey that you've taken and I love the fact that collaboration has been at the heart of everything you do. We emphasize that absolutely critically in everything we do as well. But as a startup founder sometimes which I know you've been one many times it's often what you need to do to bring, bring the relevant skills whether it's on a volunteer basis like and you know a lot of organizations initially that are bootstrapped, that don't have any funding to bring people on that journey. Not only that, but to convince them to, to jump on board as an investor, or or to get that support. And I know myself as a startup founder, I got a lot of things wrong and knowing that you've spoken and supported so many.

Founders' Guide to Team Values

Jordan Green 8:59

I'm keen to understand. Thinking about that startup founder, what are some things that they get wrong, mostly from the outset? Well, everybody's different but, yes, there are things we all learn. So I was fortunate early in my career to to engage with some really clever sales people and, of course, when you most people, I think when they enter the workplace with their own profession or their own discipline, it tends to come with a certain amount of imposed mental baggage about the other roles in the organisation, and one of the most separated, for some pretty good reasons, is sales. You often find the accountants don't like the salespeople and the engineers don't like the salespeople, and it's partly because in a truly aggressive um sales environment, a really good salesperson is a very different sort of person, uh, and one of the things about that is that they they tend to react better. The sort of person who can do sales, the sort of person who is comfortable getting told no all the time Most of us don't like that.

Fatimah Abbouchi 10:05

Absolutely.

Jordan Green 10:06

We put our passion and our effort, we make a case for what we want to do. We want to sell someone something or we want to pursue a project. We want to tell someone how wonderful it would be if we bought this house together. We don't long to be told no, it's just human, that's okay. But if you're in sales, you're going to get told no a lot. So you have to have a very different mentality, a very different um composition about how you approach the world, and one of the aspects of that is often not always, but often about more immediate gratification.

Jordan Green 10:37

So when you do get a yes the sales guy. He gets here, he pumps his hand, jumps in the air and they want to. You go to the. I mean in America, when they sell a car, balloons go up and horns go off and you get given a free gift. I mean, everybody makes a big deal out of a sale. I don't know that that's one version of the sales culture, the American salesman but I think when you're a founder, one of the things to understand that I learned from those salespeople early on is what we call consultative sales. So it's less about here. Let me sell you an encyclopedia at your doorstep, or let me sell you a car, or let me sell you a computer. It's about recognising that if you really want other people to do what you need them to do, you need to be giving them what they need. Yeah.

Jordan Green 11:29

So if you want people to come and work for you, find out what they want out of coming to work for you and base your key decisions on values. So if the hardest thing to do is to run a group of people, particularly in the pressure of an early stage startup where you're trying to grow very quickly, you have to deal with a lot of change and a lot of difficult decisions and a lot of things you've never had experience doing before, which in itself is a massive pressure. The last thing you want to do is have a whole group of people who can't pull in the same direction because they don't believe in the same things. So figure out what your values are. Figure out what the subset of your values will be that embody the business, because you can't impose all your own values on everyone else, but you can't ignore them either. So in the old days, people used to call it culture, and culture is what comes out of all of this. Culture is the manifestation of how we behave, but at the core of it is values, and so I think founders really need to understand the human values that they want in their team. They need to find out if the people they're going to try and attract to their team, share enough of those values to be compatible and what else they want. So if you're a startup, you shouldn't expect you're going to go out and raise millions of dollars to get started. I know that's sort of like a popular theme these days, but it's really not reality for more than a tiny, tiny, tiny fraction of potential companies. So if someone comes along and says, oh, I want to get paid $200,000 a year from day one and you're a raw startup, well, you just got to go. No, I can't do that. I mean, unless you happen to be fortunate and personally wealthy and you can do that. And if they say, oh, well, then I don't want to be doing this, well, that's great. So find those questions that are not offensive, but find those questions that allow people to self-select, so you're never saying no to people. So it's one of the things I've learned from these sales guys. What you do is you want to listen, you want to ask questions and listen to the answers and understand what the other party needs or wants.

Jordan Green 13:51

Need is what will get you a sale. Someone needs something. They'll pay money for it. If they want something, then it depends on priorities. So we often say as investors. We often say to founders is what you're selling a need to have or a nice to have? Because if it's nice to have, you gotta. You're going to be at the bottom of the list of priorities of what people have to spend their money on. And in today's world, for instance, cost of living is going up, everybody's prioritizing how they spend their money, and the nice to haves, the luxuries, the little treats, are the things that get pushed to the side and the need to haves are the things that we'll spend money on it's um, it's a.

Fatimah Abbouchi 14:35

I really like the. The you brought up sales and the reason for that, particularly in a consultative sales, is a really good way of framing that. I'm seeing a huge influx in marketing and marketing companies and people emphasising the importance of marketing and spending on marketing and branding and all of this stuff and, yes, that's important. But I think your comments around sales is something that I definitely learnt the hard way and I'm sure others listening probably also feel like the feeling that you described of the rejection and the no's is something that's really hard to take. But the more that you get told no, the easier it is to accept, and I think the terminology that people use is no means next opportunity. Well, at least that's what I use in my mind. So I think that consultative sales piece is really good and I think the concept of values having your values identified is something that it took a while for me to figure out in our business as well, and often is not necessarily the first thing people think about because, like you said, they're just chasing this idea that they've got. They think they're going to get all this investment upfront. It's something like you know in the Netflix shows, where you imagine it and that's what happens and they probably think that some fairy tale and that's the way it works, and I'm sure it doesn't.

Investment and Leadership in Tech

Fatimah Abbouchi 15:46

But the first few hires, as you pointed out, can absolutely make or break and we learned the hard way. We at the beginning, 12, 13 years ago, needed help really cheap. We offshored some things and it ended up really badly. So understanding the questions that you said, so that people can self-select, is really important, and it takes a very rare type of person to be able to push through that startup phase. So I think it's a really, really useful advice. I wanted to just touch on something that I've heard you say and you talk about, and you say that investment is the last thing a good founder needs and the last thing a bad founder should get. Can you elaborate on that perspective?

Jordan Green 16:30

Sure. So I mean. When I say a bad founder, I guess I mean people who really shouldn't be running a business. So we have this fad in the world today of entrepreneurship. Everybody should be an entrepreneur, everybody should start a company and, as you've just said from your own experience, it's not easy, and even when you get going, it doesn't lead to success by any certainty, and the reality is most people aren't cut out for it. So we really have to ask ourselves you know, why is this happening?

Jordan Green 17:06

Now, one of the reasons this is happening is because in the 20th century, there were more jobs than people, as a gross generalisation, of course, but in the 21st century, there's way more people than jobs. So there is a lot of pressure that varies across different countries and different parts of the economy and different socioeconomics, but there is a lot of pressure that says people can't find the jobs that they want, and so they need to make some money, and so they're going to start a business. All this stuff about how easy it is supposedly, how easy it is to make money as a YouTube influencer or a TikTok dancer and set up your own e-commerce store and sell online, go through Amazon, go through eBay, and all those things are true for some people. Yes.

Jordan Green 18:00

None of them are easy. No, they can. There are all those great examples of the outliers, of the people who just tried it and it worked, and the next thing you know they're swimming in cash and how happy are they. And so it can happen, but it is not the norm and it's not even close to the norm. So, to me, a bad founder could be a bad founder because they're just not cut out for it, in which case the worst thing you can do for them, as one human to another, is encourage them down a path that is going to make their life even more miserable.

Jordan Green 18:35

All right, and the fact that you're going to lose your money on the way is probably not a good thing either, but, as I said, I approach all these things by looking to the other side of the table, so to speak. So, in all the investing that I do, I start out by thinking about what difference is my investment going to make to the people that I'm investing in? Because in start-ups, you're investing in the people. In early-stage start-ups, angel investors invest pre-revenue it's really the people and so one of the ways I explain it to the investors is they're investing money they don't expect to lose, but they should be able to afford to lose, right, so it's not going to ruin their lives, but they're investing in people who are putting their livelihoods, and therefore the security of themselves, their families, on the line, so that matters. Now this goes back to this whole issue I've mentioned of values. Right to me, that matters. A lot of people in the world who think I'm a softy and you shouldn't think like that.

Jordan Green 19:38

It's all about the money yeah do it and and it's money and if the founder screws up, sue them, right, um, I I just don't. I don't think that's actually a successful business model or a successful investment model, but it's just not the way I think about the world. The other case of bad founders, which is the harder one in many regards to identify, are founders who are literally bad people, marginally bad, where, for instance, they're giving you all the answers they think you want. Yeah, so they can get the money, not because they're really trying to steal it from you, but that's sort of what someone told them they have to do. Yeah, a lot of accelerators train people to just give the answers that that the accelerated people think investors want to hear, and the founders don't internalise that. They just play that role, talk that script, get the investment money and then start doing what they always meant to do, which turns out is different to what they said to the investors. So that's a bad founder and again shouldn't get funded because of the dissonance between what they mean and what the investors believe and it just creates problems. And then you get to the extreme of a founder who is a malicious and willful ratbag who is just trying to scam people out of money, or maybe he's not trying to scam them out of money, but maybe he or she just has a giant ego, believes they're the only one who knows what's going on, and they want to be the next Zuckerberg, who many people have described as being a less than desirable human being, or Elon Musk, who's been hugely successful, but I think most people can see in the media is a complete prick. So. And Steve Jobs was famously hated by most people who worked with him. So you can be very successful being a horrible person, but again, it's very unlikely and they're the people that most of us don't want to invest with. So that's, that's the bad founder part.

Jordan Green 21:47

Um, a good founder is someone who actually knows how to run their business and can actually make money out of revenue.

Jordan Green 21:57

And if you can build money out of revenue then, uh, in one sense you don't need investment because you can just keep growing your business.

Jordan Green 22:09

The subtlety comes in about how quickly you want to grow your business and can you grow your business fast enough to actually survive in the market that you have to be in. So one of the problems about being in a very high-growth business in a very dynamically changing market is, you have a very limited window of opportunity during which your business can succeed. So one of the conundrums that people don't fully appreciate, including a lot of the investors, is that if you're a business and you bootstrap yourself a little bit or you get some money from some family and friends, then maybe you get some investment from some actual angel investors and then you go on and somehow one of the few who succeed in getting some venture capital money. Once you start getting venture capital money, you're on the slippery slope to failure, because you have to keep going at a higher rate to build greater value even faster, just to try and compensate the investors who've invested in you.

Fatimah Abbouchi 23:11

Yep.

Jordan Green 23:12

And your market opportunity is a window that's closing. So you're racing against the closing of the window. Now it all depends on business you're in and how you manage it and what the existential realities are. So right now we're opening a brand new window of opportunity in AI and no one really knows what the shape of that is going to be. We look backwards to an Australian success like Canva and we go well, it's generic enough that its window of opportunity is is reasonably long and and yet they were able to grow very, very quickly. So they've been very successful. Um, but now you know, right now, for instance, they've had to pedal fast to include ai and all their products, because if they don't, someone else will start eating their breakfast.

Fatimah Abbouchi 24:05

100% Yep.

Jordan Green 24:09

So good founders will get support if they need it, because they're honest people doing a good job building a positive revenue business and therefore investors will want to support it and grow, because there's a reason to believe that at some point in the not-too-distant future that business will be sold or in some other way produce a return for the investors. The thing that the founders always have to remember is and this is as true if you're an executive in a big company talking about a new project or if you're talking about some intrapreneurship, trying to look at some radical new service or product within your organization so it this isn't just about raw startup founders, and it's not about young or old, and it's not about whether you're in websites or agronomy or space tech right, it's. If you're going to do a good job, people will support you. If you treat people badly, they won't want to support you, and if you trick them into supporting you, they won't support you in the future, and this is where founders have to again think the other side.

Jordan Green 25:21

When you look at angel investors, you've got to recognise these are people. It's their money. Most angel investors weren't born with people. It's their money. Most angel investors weren't born with a silver spoon in their mouth. They're actually there because they've built, they've trod that path. They've had some exposure to an entrepreneurial experience. It may not be building their own company because, as I said, that's not what most people do, but they might have helped be entrepreneurial within a larger organization, change things around, privatize a government department I mean there's all sorts of different ways you can go on that journey, but these are generally people who are risking their very own money. Bcs and others are different because they're risking somebody else's money. Yeah, a hired gun right there. They're getting paid, usually reasonably well, to invest somebody else's money according to a set of rules and under a particular contract. That's not good or bad. You have to understand the nature of the beast it's, um, it's really well.

Angel Investing and Founder Ambition

Fatimah Abbouchi 26:17

The canva thing stood out, um, just on the fact that you know you're with the race to keep up with ai and what's going on there. They've doubled their prices, which has really outraged a whole bunch of people. I'm one of their customers and thinking our prices have just simply doubled. So I think that they must have some really amazing things on the radar for them to justify that. But I take your point around the growth side and I wanted to touch on some governance.

Fatimah Abbouchi 26:43

But before that I have a question around thinking about what you've just described between a good founder and a bad founder. If you see a good founder that has bootstrapped their business for a period of time and they've done so and they've earned revenue and now they're sort of really considering growing their business and going to that next level and they've got, they've got the foundations there, is that a more more likely reason to then invest in that business? Is that's what you would? You prefer to see a company who's bootstrapped themselves for a period of time and demonstrating revenue to really jump on board? Or are you open to talking to people really early on like what, where do you see being an angel investor?

Jordan Green 27:27

Okay. So unfortunately, the answer to that really is it depends. It depends very much what the business is. So if you're talking to someone who's doing a medical device, the chances are they won't have sales before they come to see an early stage investor. So let me be very clear when I talk about angel investing, I'm talking about private people investing their own money and their own time, so intellectual capital as well as financial capital. In fact, I define angel investors as people who won't invest their financial capital if they can't invest their intellectual capital and you can't invest it either because you don't have it, so you don't know about whatever you need to know about, or because you don't believe the team will receive it, which would not necessarily make them a bad founder, but they might be someone who's not compatible with you.

Fatimah Abbouchi 28:14

Yes, I understand.

Jordan Green 28:15

So, and then that angel investor is investing in genuine early-stage startups, which pretty much usually means pre-revenue. But it doesn't have to. And again, so I said it depends. So if you're doing a new app to sell coffee online, you'd expect people to have worked out a minimum viable product, somehow cobbled together an app and start selling to prove that there really is a market for something. That sounds so unexciting, but unexciting can often lead to very good outcomes. So it does depend. So let me give an example.

Jordan Green 28:51

This week, melbourne Angels, the group I started, is going nice and strong. We had our meeting this week. We had five companies pitch to us. One that was probably the most exciting is a couple of young women who are putting together an app. I can't be too specific because I can't portray their confidentiality, but it's a wellness issue for a particular group of professionals and they have a plan. Like they've got pictures of what they think the app should look like, but they don't have a product yet, so they're very early. Normally they probably wouldn't even have got in front of us.

Jordan Green 29:32

Yeah, but the target market one of them is a very prominent individual within their target market, which is a very well-defined target market. The target market is global and certainly big enough to build a very big business and in fact they expect. Today they don't have a product yet. By the end of next year they expect to have $25 million in revenue. So they're very ambitious and that actually is quite exciting. So one of the things you asked earlier about, you know what are mistakes that founders make. So one of the things you asked earlier about, you know what are mistakes that founders make. One of the mistakes that founders make is not going with their ambition, and this varies country to country in how it's said. They don't communicate all the news, good and bad, to their shareholders. If you don't tell your shareholders particularly if you're talking about angel investor type shareholders if you don't tell the shareholders the bad stuff, they can't help you.

Fatimah Abbouchi 30:24

Yeah, angel investor type shareholders.

Jordan Green 30:26

If you don't tell the shareholders the bad stuff, they can't help you. Yeah, right. And if you wait until you're desperate for more money.

Investing in Startup Success

Jordan Green 30:29

then you go and ask them for money, and that's when all the bad stuff comes out, because you've got to explain why you need it. That's sort of too late. They feel like, well, why didn't you tell me before? Because sometimes one little piece of advice from an experienced business person or from someone who's been on that journey before, or someone who knows your customer, could turn everything around at just the right time without you sinking all the way down into the pothole in the road, and so that's a big part of what it's about. So founders need to be brave enough to recognize that the people who've come on the journey with them actually want to help. The vast majority of human beings do want to help each other, and so that's a really important piece to keep in mind. So now I've lost my track of thought. What was I talking about?

Fatimah Abbouchi 31:20

You were talking about the target customers and whether we would invest in an early stage startup versus someone who's demonstrated Right.

Jordan Green 31:28

So it comes down to what that means. So like with this. These, these two young women I was talking about, um, we're looking at it. Oh, the secret to what they're doing is they have one of the world's two or three biggest corporates in their sector backing them, providing some cash, providing access to all their resources, allowing them to use their brand um. And this is in a very brand conscious target market. So we're looking at them going. Very compelling couple of young women, or very, put together. They know their business, they know their business strategy, they know their business model. They know their target customer. They know the pain, the customer's feeling. They know why the customer will pay to have this pain addressed. They know what their channel to market is. They know they're who their influencers are. They have the backing of a major brand. They, they, they have got it all together and so they're quite impressive. And while normally they still would have been a little bit too early, we were sitting there going, yeah, but they've got the thousand pound gorilla in the room with them.

Fatimah Abbouchi 32:34

Yeah.

Speaker 3 32:39

And frankly those guys can almost guarantee success because they want it.

Jordan Green 32:42

Yeah, right, yep. And so when you're talking about a multi-billion dollar company, multi-billion dollar revenue company, I'm talking about right, and you're talking about a start-up which may only need, at the most, a couple of hundred million dollars of investment, but the chances are this one will get away with just a couple of million dollars investment. Yep.

Jordan Green 33:04

That's. You know, when you're investing in start-ups, it is always a gamble, 100% Right. If you're not at some point, no matter what you do, no matter how much you look for, no matter how much analysis you do, no matter how much due diligence you do on everything, there's nowhere near enough information or proof or evidence or anything else that a business is going to succeed. So at some point you just have to stop and take a leap of faith.

Jordan Green 33:29

Now, everybody does that a little differently. You can call it gambling, but gambling where you walk into a casino, flip a coin on the table and hope that your number comes up, you don't have much control. Gambling, where you throw some cash into the stock market, into a big corporate, and hope they do the right thing and the share market goes up, you don't have much control. When you're investing in a startup, you actually do have a lot more control over the risk that you're taking, but you still have to take the risk yeah so yes, on the other hand, we had another guy present on the same night who's got a um, a product in market.

Jordan Green 34:11

He sold like 20 000 units. He's again totally put together. He knows his manufacturing cost, his supply chain, his distribution chain, his operating model, how much money he needs, why he needs, what he's going to do with it, how his sales are going to grow. He's got the technical team, he's got the commercial team. He's got the personal credibility, just by the way he presents and what he told us subsequently about his, his journey to get to this point. So this is you know. Founders often say to me what do I have to do in a pitch? What you have to do is build the confidence of the audience in you and the curiosity of the audience to want to ask you more questions, because that's all a pitch is about. You never get funding off a pitch. All a pitch does is get you into the next conversation yeah and and again.

Jordan Green 34:59

That's one of the things that a lot of um pitch training in accelerators and stuff doesn't prepare people for. Yeah, they make it seem like you just go in, you make your pitch, you get your funding yeah, like in the movies.

Fatimah Abbouchi 35:13

Well, they make you believe what happens in the movies.

Fatimah Abbouchi 35:15

But see, it's interesting because you know you mentioned before and and, like we, we've been a bootstrap business pretty much for the 13 years and we had a first business that didn't succeed and we learned from that and all of that sort of stuff.

Fatimah Abbouchi 35:26

So you know lots of interest in this. But one of the things you said that I wanted to come back to is we talked about so you get investment and then what? Well, then you're on that scale trajectory and my experience in the world of process and project improvement and all of those things shows me that even some of the best companies in the world don't have their shit together, I feel like, when it comes to processes and projects and governance and all of that stuff. So I feel like if you're going to be getting an investment, you need to not only be prepared for scale, but I think you need to have those foundations that are going to support that growth, because otherwise you're just going to be burning money trying to build that after the fact. Has that been your experience? Have you seen that sort of happen in the founder space?

Business Returns and Governance Options

Jordan Green 36:11

Well, yes and no. So, yes, the key thing to remember is once you take investment, you have an obligation to generate a return for your investors. You can generate a return by paying dividends. That's usually a long, slow road to realising the returns for the investors, but it's not a bad thing to do. Most start-up investments prohibit the company from paying dividends because the goal is to reinvest all the money in growth rather than pay dividends and then come ask the shareholders to put more money in the company.

Fatimah Abbouchi 36:48

Yep makes sense.

Jordan Green 36:49

The second way, the most obvious way shareholders to put more money in the company. Yep, makes sense. The second way, the most obvious way, is that you can sell the company. That's usually what we call a trade sale. You sell it into another company in the same trade, in the same business, and that's probably the most common and most preferred, because everybody has control over the deal and the deal happens at a given point in time. And then the next one would be a listing. The problem with a listing is it's not an exit, it's just a promise of an opportunity for an exit.

Jordan Green 37:24

Because when you list a company on a stock exchange, what you're doing is you do that by selling a portion of your company to a bunch of people, to the shareholders, and then the shares are available on the exchange for those shareholders to sell to other people. But when they buy and sell those shares, the company doesn't get anything from that. All it gets is a value on the share price. Okay, so if the company looks like it's doing well and it's getting lots of positive news and people believe in its future, then people believe the value of the company will increase, which means its share price will increase, which means if I hold shares of that company today and its value increases, I can sell those shares in the future for a profit.

Jordan Green 38:15

And the advantage of the public market is that it's liquid, or at least it promises to be liquid. But it's only liquid if the company has the volume of shares and the volume of trading that the shareholders can actually sell their shares. So if you're in a micro cap on the ASX which sells 1,000 shares a day, you may never be able to sell your shares and by the time you do, what were one dollar shares might be one cent shares, because if you're not going up, you're going down. Right. I mean, that's sort of one of the natures of that sort of in business environment there's no standing. Still. The other in between is, rather than doing a full trade sale, a full sale of the business, it can happen in ways where the shareholders can sell their shares, but the whole company doesn't get sold. Okay.

Jordan Green 39:18

So that could be a new investor coming in. It wants to own more of the company and buy shares from existing shareholders, and that works when the company doesn't need the money, because of course the money goes to the shareholders, not the company. So that's more about ownership and or control of the company than it is about funding the company. Uh, and of course there's management buyouts and other other. There's lots of you know, investment banking, financial engineering models about how you can do bits and pieces, but fundamentally it's either a revenue-driven dividend stream, it's a sale of the shares, probably with the sale of the whole company, or it's a listing with a promise that sometime in the future you'll be able to sell your shares at a better price than you paid for them.

Fatimah Abbouchi 40:07

So go back to listing. So a business listing typically would mean that they would need to have a board and I wanted to understand how would a business of any size know when it's the right time to bring in a board and what's the difference between me having a board of directors and, say, an advisory panel as a business?

Jordan Green 40:27

right, and I'm really glad you called it a panel and not a board. Yes, so in one sense I would say you want to have some people advising you from the get-go. Initially, they're going to be people who do it out of the goodness of their heart, because when you're first starting you can afford to pay anyone anything, and very true. And also, when you first start, there's no reason for anyone to be formally on a board, because the thing to understand is that directors take a high personal risk in being on a board of directors for a company. If once you're a director of a company, all your personal assets are at risk. If you in some way fail to do the right job with that company. And that can be as simple as the company gets overdue in making its superannuation payments for its staff, the directors are liable for that money. And if things go belly up, the tax office comes to the directors to pay that money, and that's a very real risk that people need to understand and be aware of. So there are a lot of people who are very capable as directors who choose not to be because they don't want to take that risk. So they're happy to go on to advisory panels. There are other people who really feel that their contribution is in the governance role, rather than just being an advisor, actually helping guide the company, steward the company. So good governance is often referred to as stewardship, and so that's different.

Jordan Green 42:12

So you need to my view, you need to formalise your board. You certainly need to formalise a board at the point where you're taking on outside investors, because the investors should be represented on the board. And then there's a whole lot of art that goes into shaping what a board looks like and how you remunerate people. A board should never be structured around somebody seeking to control the company. The other big mistake that's made in the world today, particularly with the misinformation about how these things work, is the belief that a director on the board who has been nominated or appointed to the board by investors can exercise shareholder rights in the boardroom order. Right.

Jordan Green 43:14

So once you're a director, your obligation your first obligation is to the company. Your second obligation is to the staff. Your third obligation is to all shareholders. Your fourth obligation is to creditors, those people, people completely outside the company and in theory, if you can satisfy each of those four priorities, you can then represent the sectoral interests of a particular group of shareholders, but in practice, asic and other regulators around the world don't believe you can ever really get there. If you are in the boardroom representing the interests of just your sectoral shareholders, then you're in breach of your duty as a director and liable to prosecution. Now there are some people who try and work around that by writing shareholders agreements that say explicitly this director can exercise the rights of the shareholders who appointed them to the board in the boardroom.

Jordan Green 44:11

So I'll leave that for the lawyers. On the one hand, the law says you can contract anything anyone agrees to in a contract you can have. But at some point those things may contravene either the law or the regulations and that's up to the lawyers and the courts to decide. But it's horrible practice. It's very bad practice, absolutely. So you should have a board whenever you can benefit from having a group of people who are going to stick with you and give you strategic advice, challenge you and guide you, and the people you want on the board are the people who can actually contribute value. You don't just want someone on the board because they've got a big name.

Jordan Green 44:51

They can go on your advisory panel because you're just using their name to attract other people. If they have no other value than their big name, then that's okay. If they're happy for you to use their brand and you can benefit from their brand, then use it, but you don't need to get them involved in the intimate running of your business, which is what the board is about. And then there's the question of paying. So founders and executives who go on the boards of their own companies shouldn't get paid anything extra for being on the board, because they're already getting paid a full-time salary. This is just part of their job. Non-executive directors should get paid and, in my view, get paid a hell of a lot better than they typically do these days. Now, in a startup or in a small business, the challenge is that there's often not a lot of cash around, not a lot of free cash flow to pay people what they're worth. So there is a tendency to say well, I'll pay you with equity as well, or instead in the beginning and then later on as well. The problem with that is is the equity ever going to be worth anything? So for a company on that trajectory towards a trade sale in five to 10 years. You're taking the gamble that it will be worth something For an ongoing small business, a great consultancy or a digital agency or some other sort of professional business or non-professional business that's doing really well, generates good income, pays its staff well, allows its founders to live a good lifestyle, but is never really going to grow hugely and is probably never going to be sold for a huge amount of money.

Jordan Green 46:29

It's very hard to reward people with equity in that business, because that equity is never going to be sold for a huge amount of money. It's very hard to reward people with equity in that business because that equity is never going to be worth anything, and so these things have to be looked at as a rule of thumb. I guess the way I look at it is I would expect, the chair of a board, a non-executive chair of the board of directors- I didn't understand that.

Jordan Green 46:56

There you go. The phone was listening for some reason.

Fatimah Abbouchi 46:59

There's technology for it, just out of the blue.

Jordan Green 47:03

So I would expect the board of a company not the non-executive chairman of the board of a company is probably going to be spending, say, two days a week on that business. Now that depends on a lot of other factors, but just to use that, the model stays the same. The amount of time is the only difference. I believe that that chairman should be paid basically at the same rate as the CEO. I believe that that chairman should be paid basically at the same rate as the CEO, but the CEO is working five days a week, the chairman is working two days a week. So the chairman gets paid 40% of the CEO's salary.

Jordan Green 47:42

And it's quite common, because the chair does carry additional responsibilities. It depends on the shape of the board and how it's worked that a non-executive director on that board will get paid less than the chairman, of course, and how much less. It often varies between, say, the chairman getting paid, say, 20% more to double, so 1.2 to 2 times two times the director's payment. But I believe that we need to rejig the thinking on how directors get paid, because our liabilities keep going up, our responsibilities keep going up and the pay in fact keeps going down and people seem to believe it's perfectly okay to have a director on a board of a company that expects to be doing multimillion-dollar revenues and you're going to pay them forty thousand dollars a year where, where the ceo is getting paid, you know, 150 to 200 000 a year.

Fatimah Abbouchi 48:39

it just doesn't make sense even in corporate, as you mentioned um. You know I spend a lot of time in the financial services space and there's the you know post the um, the royal commission. A few years ago there was these new um restrictions and requirements from the regulators, like the bear policies and things on directors. That's just so crazy. The criminal um that you know can end up in jail. That, you know, maybe wasn't there before. So you're right, they're taking a lot of risk even as a, as a director on a, on a board in a large company, let alone, you know, your smaller one. So you're 100% right, the risks are definitely there and they're ever increasing. So you'd have to question why you'd want to be on these boards really, because at the end of the day it's depending on how the company is being run. Like the board can only be, you know, typically like how often does a board meet? Two, three times a year on average for a large business, is that sort of the typical?

Jordan Green 49:40

No, no. So for an ASX 100, 200, 300 type business, you'd expect the board's meeting six times a year. Okay.

Jordan Green 49:51

And they probably have a two-day strategy meeting a year and they will have subcommittee meetings of the board in between all those other meetings. So it's actually quite a continuous business. Okay, and, as you said, they're liable for ohns and all sorts of other things where they can go to jail. If a worker has an accident and the determination by the work care people is that that accident was totally preventable. It happened due to negligence, and it happened due to negligence on an issue that had been raised to the board multiple times. That makes the directors liable and they may or may not get prosecuted and if they're successfully prosecuted, they may well go to jail because somebody had an accident in a company that employs 5,000 people, 10,000 people, 100,000 people. So they're very big risks Somebody who's doing it. So one of the other things is not only did those legal aspects change, but the ASX guidelines changed, so the listed companies. It used to be common that directors built a portfolio.

Jordan Green 50:52

You know they were on 10 different boards yeah because they were only getting paid, you know, 40 or 50 000 a year. So to make a and you have to understand that when you get paid that money it's not like getting paid that as a salary You've got to cover all your own overheads. Yeah, so it's more like being a contractor than it is being an employee, and so they would build up a portfolio to give themselves enough of an income to make it worthwhile living this lifestyle. Over the last 10 years there's been a very strong trend, and now I believe they've changed some of the ASX rules to limit the number of boards you can be on at the same time. Because the question becomes with all of this burden to do the job, how can you legitimately be doing the right job for more than x companies at the same time?

Jordan Green 51:43

yeah and that puts more pressure on those companies to pay those directors more because they can't have as big a portfolio as they used to have. The pay still lags behind all the other pressures.

Fatimah Abbouchi 51:59

Yeah, it's definitely challenging. One of the things I was thinking about that I wondered it's a question I posed out there a question I posed out there, having presented in front of a number of boards from an enterprise investment sort of management perspective a few times one of the things that tends to be put in front of them is, you know, really large strategic nature initiatives, projects, programs etc. Within the different portfolios of a business. And I always wonder a lot of the time, at least for the companies I've worked with. I seem to find that some of those always wonder a lot of the time, at least for the companies I've worked with.

Effective Board Governance and Strategy Integration

Fatimah Abbouchi 52:30

I seem to find that some of those board members, or a lot of them from what I've seen, experience personally, they don't typically have that background in projects and programs and actually understand that space. They're more operational in nature. So I guess, just I'm curious, do you have any thoughts on? Like my view is that they should have some experience in projects, programs like that. Fundamentally it makes the world go around. Do you have a view or your different experience in that space?

Jordan Green 53:00

uh, so it's, it's the challenge. So you know, just talking about boards generically big companies, small companies you want a board comprised of people who have a diverse mix of skills and experience that are well suited to the needs of the company. People debate the finessing of it, but fundamentally it's up to the executive team to determine the strategy for the company and it's up to the board to refine and agree with that strategy. So the strategy originates with the executive but the board is part of deciding whether it's the right strategy and what it looks like, and then whether the plans proposed to implement the strategy are the right plans. And the challenge is it doesn't matter what company you're in, what board you're on, you're never going to have all the skills and experience that you need. So there's.

Jordan Green 53:51

I mean, when I first got involved in this space, there was nobody with technical experience on the boards of all these big companies whose businesses fundamentally relied on their technology. I mean, I remember when I first started looking at the Telstra board, there was a guy there from the pork industry. Now, maybe he was a really good guy from the pork industry, I don't know and maybe he had a lot of relevant corporate experience, finance experience, project management experience, I don't know, but it made no sense on the face of it that he was there and there was other than the executives of Telstra, there was nobody on the board who actually had technology experience, and you see that. And so for a long time that was the cry, like how can everybody be using technology and they don't?

Jordan Green 54:37

have somebody with that expertise on the board. And it's similar with what you're saying how can you be doing whatever it is you're doing, which is a project based business, and you don't have project management skills on the board? So that's a legitimate question. It's a legitimate point and I do believe, where it's core to the business, you should have those skills on the board. But what's more important is that the board works well together, has the core commercial and governance skills to guide the business, provide the stewardship and gets access to the expert advice it needs, as it needs it. So what I'd be saying is, if you presented to those boards, then maybe that's the whole point that that board didn't have those skills and you were there to give them that expert advice. Your experience may be reflecting you didn't think they were expert advice. Your experience may be reflecting you didn't think they were capable of understanding the advice you were delivering, and so that is a problem. But that doesn't mean they need those skills that you've got. It means they need better skills as board members, because part of being a board member is the ability to get advice from the accountant, because you can't all be experts in finance, and get advice from the tech guy, because you can't all know about the technology and get advice from the insurance people and get advice from the sales people. And get advice from the marketing people. And get advice from the project management people and integrate that. Bring it all together, weigh it up it up. Ask the right questions. If you don't understand, ask.

Jordan Green 56:12

One of the biggest problems with a lot of board members, just like founders, is they're embarrassed to expose their downsides right, to talk about what went wrong or say what they don't know. A good director is always asking questions. They're not afraid to say. That was very interesting, but I don't think I really understood the point you were making. Could you explain this again? Or can you explain to me in a different way why that was something you thought was important? That's the question you should be getting. If you're getting that question, the board's hearing your advice and coming to grips with it and then integrating it with all the other things they're hearing to try and create the priorities and and the frame decision making framework within which the board can make the strategic decisions.

Fatimah Abbouchi 56:55

That is its job that's a, it's a, it's a really good um, um, it's really good feedback. Thank you, I I sometimes think particularly not, not being a board member myself, you know I throw, throw the question out there, sort of asking. But for all I know, the answer is probably very, very depending on which board you know I'm talking about and different people's experience. But just to elaborate on the example, this particular instance which comes to mind, they were spending, I would say, sort of $500 million to $700 million on projects per annum at the time sort of $500 million to $700 million on projects per annum at the time and the board members asked to see the overarching governance strategy for the projects and programs post this big demerger that was happening between two well-known companies.

Fatimah Abbouchi 57:42

And all of this information was presented and subsequent, as a contractor, I wasn't there to see everything through, but subsequently a number of challenges arose and a lot of things went off the rails and the things that had been committed at the time didn't actually happen. And so my view, my thinking, was, if those board members maybe had potentially more experience, they might have been able to ask the right questions of the people that were presenting this information. They promised, they promised them the world but really in, in reality they didn't get what they were promised and you know I would be questioning why not when you're spending five, six, seven hundred million dollars on projects. So that's where I think you should really have a dedicated board member that has that project experience when you're spending that sort of money on projects well, yes, um, like I said, if it's core to the business, you probably should.

Jordan Green 58:38

Yeah, equally, they should certainly have had a dedicated board member or team committee oversee that work and to become informed in that work.

Jordan Green 58:48

But you know, part of it would, I guess you know could have been that, were you and I'm not saying that you were the one, I mean I think you said you were the one who were making this presentation to the board. Uh, you know, I would. If I was you, I would have made that presentation. I got the sense that you said you got that they weren't really following and I would have pushed them, because it's my job as a, as a consultant, as an advisor, to actually well, again, this is the way I approach it. It's the value system I approach with um to actually make sure they get the value that they're getting. I want them to pay me well and if I get the sense they haven't heard me, I'll go look, I don't want to, I want to. I don't want to overstep here, but do you understand the significance of what I've just said and that if you don't actually follow this recommendation or if you're not able to get that information, uh, your 500 million dollars on projects, could be 50 wasted 100%.

Jordan Green 59:49

Do you need me to explain that again?

Fatimah Abbouchi 59:51

100%, absolutely.

Consulting and Strategy Implementation Challenges

Jordan Green 59:53

So force your audience politely, professionally, yeah, give them the chance at least to revisit. If you don't think it really sunk in Now they might turn around and say, no, no, we did get that. Thank you very much. You can go now. You've done your job right, you tried. Thank you very much. You can go now. You've done your job right, you tried it's.

Jordan Green 1:00:13

I mean, consulting is a hard game in a lot of different ways. You know, many years ago I was close to the management consulting world and the joke used to be that the big companies would bring in the big-name consultants, the McKinsey's and BCG's of the world, pay them millions of dollars to do these important studies that are onto about last century, and you would end up with a boardroom table covered in printouts, you know, in reports, a meter deep across the whole boardroom table. Consultants would shake their hands and leave and the company would look at this and go what are we going to do with this? And they'd pile it all up and stick it in a file cabinet and forget about it. Or they'd go out and hire the one or two man consultant, boutique consultant, in that space, pay them a fraction of the money, say, read all of that and tell us what we should do that's literally what we do.

Fatimah Abbouchi 1:01:08

That's literally happens to us. I know it still happens. It's still, it's very, very common. It still happens. I had a very senior, very, very sort of big company named C-Level Executive say to me that he had all these ideas and visions and things and his board wasn't listening to him. So he had to go and pay several hundred thousand dollars literally for the PowerPoint pack, which I saw was about 200 pages, to say exactly what he had outlined, but just with more pictures and graphs. And then they agreed to go forward on that approach. But then that big consultancy, obviously focusing on strategy, not execution, because that's the hard work. No one wants to do that. So then we were asked to actually help decipher that and make something usable of it. But you're spot on, and that literally still happens today very, very frequently.

Jordan Green 1:01:57

Of course, big organisations, governments, corporates, whatever the big-name consultants are often called in for one or both of two reasons, as you just said, the validation reason.

Jordan Green 1:02:09

So the client says, yeah, this is what I want you to tell me yeah, exactly and then they go away and spin their, spin their wheels, generate all the content, and they come back and, lo and behold, they tell you exactly what you asked for.

Jordan Green 1:02:21

Yeah, now the consultants said it, and it's the outside guys, the big bucket experts yeah, and the brand is what you've paid for, yeah, and you can take that story, whether it's to outside guys, the big bucket experts Yep, and the brand is what you've paid for, yep, and you can take that story, whether it's to your board or your executive team or whatever, yes. The other reason, which is, like I said, either an alternative or conjoined, is simply to cover your butt Like you're going to do this, but you get the big consultant in and get them to look at all of this stuff and they come up with the same answer. And so now, when you go ahead and do it and afterwards people go, oh, but you shouldn't have done. Oh, but look, we had these guys in and they said it was all okay, and now it's not your fault exactly someone to blame, basically now, that's.

Jordan Green 1:03:03

That's. It is real. It does happen a lot. It does. We have to be careful of not being so cynical and sceptical that we ignore the fact that a lot of these big consultancies can do very, very valuable, genuine work when they're given the opportunity to do so. But you're right, and again it goes through cycles.

Jordan Green 1:03:22

All the big strategic business consultants, management consultants they're strategy people, absolutely. They're not implementation people. And they do all every sort of seven to ten years there's a wave in the industry where they say, oh, we should implement our own advice and they find out how hard it is to actually implement their own advice. Number one understanding their own advice from an implementation angle is really hard because they're not implementers, so they've not given the advice in that way. Yes, and number two implementation is the hard part of the job.

Fatimah Abbouchi 1:03:56

For many people I mean, you need it all, you need the strategy. Sometimes conflict of interest as well. Like sometimes it's like they're kind of grading their own homework. It's like when project management and governance are in the same, literally the same bucket and they don't, you know, have someone sort of overseeing that. It's sort of like they're doing that. But, to your point, there's absolutely value in the strategy bucket and they don't, you know, have someone sort of overseeing that. It's sort of like they're doing that. But, to your point, there's absolutely value in the strategy work. And sometimes when it's done not because you were told to do something somewhere, but you actually took the time to do the research, some really good work, and there's absolutely no denying that.

Fatimah Abbouchi 1:04:24

The challenge comes. What clients tend to say, at least? Or most recently, one of our clients said we had and they named three or four different consultants he's much, much bigger than us and then they said but the problem is we don't know what the mechanics are, how it all hangs together day to day. That's what we're missing. So they still need that piece there. But then they need the mechanics. And, to your point, I don't think the really bigger strategic firms may be excelling. That and that's where your boutiques really can make a big difference at a fraction of the price.

Jordan Green 1:04:55

And if I bring it back to what we were talking about before, a small business doesn't need a CFO. No. And here I'm not talking about the label, because you can call people whatever you like, but in a more sort of formal sense, a CFO is a high level strategic financial professional.

Jordan Green 1:05:15

a small business needs an accountant yes a very small business just needs a financial controller, who may not even be an accountant, but just a glorified accounts clerk who can do accounts receivable and accounts payable and bookkeeping right, yep and and. So these are. These are the same things businesses struggle with. Should I have a cfo? Well, you should have the benefit of strategy, and nowadays there is a lot more choice. You can go out and find a cfo who you can hire to give you advice, you know, once a month for two hours at a very affordable price, and they can do a good job for you.

Jordan Green 1:05:55

Because the other thing to understand and it goes back to your point earlier about how often boards meet- it depends on how complex the business is that the boards have to oversee, because implementation takes time and until you've implemented a certain degree, you don't know if your plan is right or wrong. So if you have a strategy organ like a board meeting every month, which it will do in an early stage high growth startup, that's because everything is changing quickly and you have to adapt. But get a year or two down the track, you've got your sales model working and it's about getting more customers and slowly adapting or not slowly, but more slowly adapting your product or service offering. You don't need the board trying to adapt the strategy every month because that's just going to give you whiplash. Right, I'm supposed to be doing this and I just got started doing that and I did that for the last two weeks and suddenly the board is telling me I've got to do this and so balance of timing and coordination of refining strategy and changing direction and creating plans and implementing plans and measuring outcomes these things all have to be drawn together into a pace that works well for each business and that will depend on the nature of the business, the market. It's in the nature of the people how many people, what resources you've got to work with, and earlier we touched on the tension of sales and marketing.

Jordan Green 1:07:39

So we usually it's quite conventional to say sales and marketing, right, bundle them together. Except, sales generates revenues and marketing is a cost centre. A really good marketer will put together a marketing program and tell you what it's going to cost and they will tell you that if it works, the salespeople should be able to sell this much. But marketing isn't really generating revenue. Marketing is communicating with the rest of the world, listening to the world, shaping your message and sending it out into the world and giving the salespeople the tools they need to close the deal.

Jordan Green 1:08:19

The salespeople are not the primary communicators that's the marketing people but they are the primary deal makers and closers and so they are a revenue generator. So they get measured on sales and get paid a commission, and that's that short-term satisfaction I talked about. And the marketing people are an overhead, just like the accounting people, the engineering people, the administration people, the executives, right. So it really is important that people get an understanding, even in a tiny little company, if you understand how these bits and pieces work together, because, as you said, the temptation today is you get battered from all corners. Do Facebook ads, do LinkedIn campaigns, do a radio campaign. It's really really cheap. Well, it is, but is it relevant to your business?

Jordan Green 1:09:11

I mean your business you're not going to reach your audience through drive time radio.

Fatimah Abbouchi 1:09:16

Yeah, and there's a lot of business, a lot of small businesses, micro businesses, one-person businesses, mum and dad, businesses that I see in these groups and you probably see it as well that are absolutely being ripped off on the daily basis because they're being told to spend, you know, five thousand dollars a month on google ads and you're like, no, no, there's no point in spending five thousand dollars on google ads if you um, you know you don't have the capacity to service those customers if they do come in. Or, to your point around sales and marketing marketing is is measured on vanity metrics that you know that doesn't really count necessarily, but you know, if they're brand building, building credibility, then yes, absolutely there's value there because it makes the salespeople's job easy, because they go. I remember that brand and I've got, you know, trust in that brand. So, yeah, there's too many things that businesses, especially the small ones, small businesses yeah, go ahead.

Jordan Green 1:10:13

I was just going to say small businesses. One of the problems for small business owners is what you're saying, but equally, they just don't have the time to evaluate those things. Yes, so that's how they get caught. I mean, groupon was a great example, right? Groupon was a pretty horrible business because it took 50% or more of the value of the sale. So if you're a restaurant giving out discount coupons on Groupon, that's a buy one meal, get one meal free and for the sake of argument, on each meal you make a 50 margin. So if you're selling one meal and giving one away for free, you're not losing any money but you're not making any money, right. So you got neutral, but you're getting customers and exposure and hopefully repeat business where you get the full value except.

Jordan Green 1:11:12

Except Groupon. Take 50% of that coupon, so now it's costing you. The meal you're giving away is a real cost, losing money on every one of those deals. But they pushed it out and told people how wonderful it was. And certainly there are various businesses for which it works well. But the small business owner is under this pressure and saying, well, they're all talking about this thing and I should try this thing, but they don't have the time to learn and ask the questions Well, how long should I use it for? How do I measure if it's working? Is there a better competitor in the market? You said marketing is measured on vanity metrics. It shouldn't be. Awareness marketing is not of great value to most companies because they don't have a brand that's valuable enough to do awareness marketing. Marketing should be measured on financial metrics directly related to sales outcome. That's how a professional marketing person measures themselves.

Fatimah Abbouchi 1:12:17

Absolutely.

Jordan Green 1:12:18

But that's not how an advertising agency measures itself. That's advertising one form of marketing. You've got advertising, you've got PR, you've got a whole bunch of tools. These days, all the social media stuff makes it even more complex.

Fatimah Abbouchi 1:12:32

Absolutely.

Jordan Green 1:12:33

So I think the challenge for all business owners, big and small, is to be able to get enough information to make an informed decision in the time available.

Fatimah Abbouchi 1:12:45

Yeah.

Jordan Green 1:12:48

And you can just imagine if you're the executive for a big company trying to make a decision. You can just imagine if you're the executive for a big company trying to make a decision. Your challenge of being properly informed is as magnified as the scale of your company is. So it always seems to people in small businesses oh, it must be so much easier in the big business because you've got all these resources, and yes, that is true, but it's also a much more complex decision yes and they don't necessarily get all the information you'd think they might be getting absolutely, absolutely, especially as the seeing being having the, the corporate lens in sort of that world and then being small business.

Fatimah Abbouchi 1:13:27

I agree with you because, seeing in corporate, by the time the report starts here and gets to the top and this goes back to that board that I was describing before they don't get to see what really was happening because every level manager changes it to make it look like a beautiful watermelon. You know, green on the outside, red on the inside. That's exactly what happens and the executives at the top unfortunately don't have the time to dig in because they've got, you know, things to worry about. That potentially, unlike maybe, a small business who we might lose a sale or, you know, we might cop some late fees we're not going to be at the risks, at the level and criticality of a large business who has to experience bigger risks and more challenges.

Navigating Challenges in Small Business

Jordan Green 1:14:12

And I guess, bringing it all the way back to one of your earliest comments. Today we're seeing in a lot of big companies that they're laying off staff.

Fatimah Abbouchi 1:14:20

Yeah.

Jordan Green 1:14:21

Right, and this, if you look back over any period you look back over 20, 30, 40, 50 years you'll see this again is part of the business cycle. Very big businesses always come to a point where it's important to lay off staff as something changes in the mix and maybe just the sentiment. Remember they're managing their business to their share price, if they're listed, as much as to their fundamentals. Yeah.

Jordan Green 1:14:46

And then I mean there used to be the joke at Telstra that every sort of five or six years they would fire a whole lot of staff and hire them back as contractors yep and another few years later there'd be this complaint why are we paying so much for all these contracts?

Jordan Green 1:15:00

so they'd hire half the contractors on staff because they need them, or they'd cancel all the contracts and then they'd have to hire a whole lot of new staff, most of whom were the contractors. So you know, these things do happen, some for perfectly legitimate reasons. It's it's, but we're seeing that happen. But, as you said earlier, when you're first starting and you're getting your team together and you're trying to collaborate with everybody, it's hard to. It's hard to learn to be good at hiring and it's hard to have the time and resources to hire the right people and it's hard to find the right people. So one of the things that small business owners have to be prepared for is to fire people. And yes, I know, in Australia it can be quite hard to fire people. But the point is, if it's not working, you're not helping anybody.

Fatimah Abbouchi 1:15:48

Yeah.

Jordan Green 1:15:49

Right. If they're not helping your business and you're a small business then they're putting your business at risk, which means they're putting their own pay packet at risk 100% right. So finding a way to to move on people who don't belong in your business is as important as it is to hire people in the first place.

Fatimah Abbouchi 1:16:06

I learned that the hard way, definitely in my business, in in time and I 100% agree with that. It's so critical because it makes such a difference to the rest of the team and also your clients and you don't have a chance to regain. You know, if there's any damage done, you don't get a chance to undo that damage. So I agree with you. I think you know. Just to close out on that small business point and wearing that little hat, I wrote a post about this the other day, just about the amount of things we have to figure out as a start starting out. And there's too much and there's too many tools out there and every tool tells you that they do something amazing and every tool's got AI in front of it. It's just really complicated.

Fatimah Abbouchi 1:16:48

So one of the things I felt was really useful for me was I drew a pretend org chart with the C rolls all over it you know aspirational thinking and said what is the absolute critical people, skill, process or tool that I needed right now to minimize risks?

Fatimah Abbouchi 1:17:07

For example, to your point earlier, bookkeeping skills was something I didn't have and it would reduce the chances of me getting in trouble with the ATO, so that was something I had to focus on. So I think managing it like a project and incrementally bringing that then will not only support your anxiety levels it did for me but I think, coming to back to the investment that we talked about at the beginning, being able to present that and being, you know, put put together as per those two um entrepreneurs that you talked about before, I think would build that trust and credibility to maybe make that person more investable. So, yeah, there's definitely um, it's definitely a learning journey, but it's fun and I'm sure you've enjoyed your, your experiences in this space. Otherwise you wouldn't be doing it, so you're just going to get a job yeah, well, yes, um, I mean it comes with its ups and downs and and to your point about you know drawing out the chart and figuring things out.

Jordan Green 1:18:00

That's why you want a board or an advisor, someone who's got more experience at those things than you do. You've got your specialization, you've got your skills, you've got the things that you should be the best at. Having someone else who can help you think through what that org chart looks like and what are your priorities is just healthy. It's just really really healthy. So one last point on that is that a lot of people running small businesses, when you're the person at the top you wear the CEO title, managing direct title, whatever you're calling it. It is always, to a degree, isolating and lonely. Always.

Jordan Green 1:18:40

Because the nature of business in the Western world, actually across the world, doesn't matter. The nature of business is a pyramid. It can be a very sharp pyramid, it can be a very flat pyramid, but there's always a point where there's one person who has to say the buck stops here. And that's a challenging place to be and it means that there will be elements of your, um, your personal experience, that you don't feel comfortable sharing with other people in the company sharing with other people in the company.

Jordan Green 1:19:11

So a good board or advisor can help with that. But they may also be too close or they're a degree of influence where you don't want to share something. So the other thing I do think works well for many, many people is find one of these networks the CEO lunch group circle table, they all have different names find one that that is a good fit for you, whether it's once a month, once every two months, twice a year. Those are the things you choose. Those are the things you decide, uh, how to engage. What's right for you it's. But you go into a room where everybody else like you, like they're facing the same sorts of challenges and you can talk about and it's all. It should all be confidential, and and you can talk about these things with people who understand why you're worried about them. They've got the same worries and they can offer their input, which is their experience plus the experience they're getting from their board or advisors or staff or whatever. So it's a whether you want to call it a self-help group or a support group or a club or a network, you know, I would strongly recommend that people do it.

Jordan Green 1:20:31

There are ones that try and focus on particular industries. There are ones that try and focus just on women. I believe the strength is in the diversity yeah, again, on every axis. So I think there should be old, experienced people in the room, young, inexperienced people in the room. There should be men and women or people who don't identify as either. There should be different industries. It may not be. Some industries are very specialised. Somebody in the ammunitions industry probably doesn't belong in the same room as somebody running a community welfare organisation. There's nothing wrong with either of those organisations, but they are radically different in their environments. Highly regulated businesses belong together. You know, professional businesses belong together, but that covers a broad suite 100.

Fatimah Abbouchi 1:21:24

There's not enough out there for service based businesses. That's what I find. I feel like there's very limited, at least in the last 13 years. I didn't see much support, much investment opportunity, much because everyone wants to see a tangible product, whether it's digital or otherwise, whereas service-based businesses when I was looking out there for groups, there wasn't that many. So to your point, I 100% agree. Having some sort of advisor or multiple, I remember having. I do have. I've had a corporate advisor for my corporate career, I've had a business advisor for the business that I was growing, and my personal advisor is my husband, so I like to give him that title. But having multiple advisors sometimes is good, and maybe that's the new advisory panel. So I agree with you completely. I think it's definitely looking well out.

Jordan Green 1:22:12

And industry associations can, or professional associations can sometimes provide some of that mutual support type environment. But there are, I mean even for service companies. There are I mean, after the call I can give you the name of one that's coming together right now but there are these CEO roundtable type things where you get together once a month or once every two months for lunch, um, and I I I haven't been part of any of them, I've been a guest speaker at a lot of them, um, and they're run by people. I mean, the ones I've attended are run by people I think are really good at running them. Uh, it's, it's a mutual trust, mutual help environment that sounds amazing.

Fatimah Abbouchi 1:22:54

I'll definitely take you up on that offer, for sure, and I'm sure, if it's okay, I'm sure share some of those tips in the in the show notes as well. So how can people um connect with you? Um, where's the best place for them to find you? What? What would you like to to leave them with? Um? We usually close out our podcast asking if there's anything else that you'd like to share with our listeners a piece of advice, call to action or a question to ponder, and you've done a lot of that today. But is there anything else that you wanted to share for our listeners today?

Jordan Green 1:23:23

Well, the easiest place to find me is on LinkedIn. I'm fairly transparent on LinkedIn. I think most of my career is laid out there on LinkedIn. I think most of my career is laid out there. If people are interested in investment, I'd encourage them in startup investment. I'd encourage them to go to the Melbourne Angels website at melbourneangelscom and follow the process the group has. It's one of the top startup investors in the country top startup investors in the country.

Jordan Green 1:23:59

If you're running a successful sort of midlife business that's broadly in the sustainability space particularly around water, waste or energy and you think you might be ready to step up with a bit of strategic investment, then reach out because I'm building a new private equity fund to do exactly that. If you're interested in the technology space, in information, computing and telecommunications type technologies, and you're just interested in the community and want to be more involved, then the Piercy Foundation is all about that. We're an all-volunteer charity. We champion the people in the sector. We give some awards, we hold some events and we've got our national award event coming up in Brisbane in November.

Jordan Green 1:24:50

We're running a national series of conversations around the intersection of the energy sector and the ICT sector for the transition to net zero and the schedule for those and the bookings for those. They're all free on the website of the PC Foundation, pcorgau. We think that's really important that everybody who's interested get involved because, again, this is about the collaboration, right. This is about saying how do we make a better future for Australia, and the one sure thing is it's going to take us all working together 100% Well said.

Fatimah Abbouchi 1:25:32

No one. Us all working together 100% Well said. No one has all the answers.

Jordan Green 1:25:36

And PC Foundation, by the way, doesn't have any of the answers. We're just facilitating the conversation. It's up to the participants to actually come up with the results.

Agile Ideas Podcast Farewell

Fatimah Abbouchi 1:25:47

I'll be definitely sure to include all of that in the show notes. I did take a look at the work that the PC Foundation does, as well as your group, and definitely I'm sure there's some people in mind, I think, within the sustainability space that would no doubt benefit from being involved in that. So hopefully they get a listen to this and can connect with you as well. But I know we've gone over, and I think that's because we were having such a good conversation. Particularly, I got really excited about governance, which doesn't happen often, but I appreciate the emphasis of good governance, which is something I love to talk about. Jordan, thank you so much. It's been an absolute pleasure and I'm sure we're going to continue talking in other means ongoing as well.

Jordan Green 1:26:31

Thank you, fatima, very much for having me, and thank you to everyone who's listening for getting this far in the journey.

Fatimah Abbouchi 1:26:36

Thank you so much for listening to this podcast. Please share this with someone or rate it if you enjoyed it. Don't forget to follow us on social media and to stay up to date with all things Agile ideas, go to our website, wwwagilemanagementofficecom. I hope you've been able to learn, feel or be inspired today. Until next time, what's your agile idea?