Speech! Speech!
So I was invited to give a talk the other day at an event called Inspire and Connect, which did what it said on the tin. A few people have asked to see what I said, so here it is - a collaborative effort between me and Rob, but mostly Rob - reproduced by the miracle of modern blogging. Bear in mind that this was for a non-publishing audience so apologies for the grandma-egg-suckiness of it.
"Three years ago I had an important decision to make. There was a lot to weigh up and most of it depended on predicting the future in an industry I didn't know much about. So I took a deep breath and made a choice. In the end the choice I made drastically lowered my income, scrambled my long-time career plans and took me away from a blue-chip company to work long hours in the corner of a grubby rented office where the heating was broken, the printer rarely worked and the air-conditioning consisted of opening a window to let the traffic noise in. That was three years ago and a lot has happened since then. Now our offices are a bit more cosy, there are five of us - and my long-term financial future could now be described as 'uncertain' rather than 'downright precarious'.
And since I've been asked to talk about what inspired me to leave Deloitte and start Snowbooks, I thought I'd give a nod to good business practice, and attempt what I believe we used to call a 'post-implementation review' of my decision.
And it might surprise you to discover that by any of the measures I learned in business school, I made the wrong choice.
Although my company is doing quite nicely, it will have to do a lot better if it's to provide me with a higher lifetime income and a better pension than if I'd stayed among the blue chips. And even then, a small new company is always more of a gamble than a large mature one.
Of course there are other factors to take into account besides the 'risk-adjusted net-present-value' of my decision. There's the fact that I was miserable before and now I'm happy. There's the fact that I now tend to find my working day satisfying rather than frustrating. There's the fact that my carefully chosen staff are fun to be around. In fact even my suppliers, believe it or not, are selected according to whether I like working with them. Naturally my first thought is whether they're good value for money, but if I don't like dealing with them then all that's irrelevant: I find someone else. It's one advantage of being a small fish in a big pond: there are nearly always alternatives.
And while we're on the subject of success, you might find it interesting to hear about a discussion I had the other day with a finance director who was frankly rather scathing about Snowbooks. He acknowledged that the fundamentals were sound, but in his mind, we were paying our staff too much, not diversifying fast enough, we were worrying about people when we should be worrying about profits, and we weren't taking full advantage of our opportunities to raise expansion capital and grow the business more quickly.
It was a struggle to explain to him why I didn't want to follow his advice and I'm not sure in the end that he understood. It wasn't that his suggestions hadn't already occurred to me. And it wasn't that I failed to understand the reasons behind them. The problem was that his advice didn't fit with my plans for the future of the company and I couldn't think how to explain those plans without sounding hopelessly unworldly or naive. Maybe the rest of this talk can be the explanation I would have given him if I'd had a little more time to think about it.
The first thing I should have reminded him of is that financial success is just a way to make life more pleasant. Nothing more. It's a way to make life more pleasant. No one in their right mind would swap a happy life for a miserable one with more money. Maybe there are loopholes, like what if a dying relative needed an expensive operation, but then trying to save dying relatives isn't about making money; it's about the things we value more than money.
So while it may sound mushy or idealistic, I'm not interested in running a company unless it makes me proud and improves the quality of my life. Yes, it can do that partly by making money, so that I can buy shoes and maybe a pony, but it can also do that by giving me a wonderful team to work with, and interesting projects, and a harmonious working environment, and a proving-ground for my business ideas, and last but not least, the adoration and envy of my peers. What the FD didn't grasp the other day was that if I'm going to throw away all those non-financial things that I enjoy so much, I'm going to want a hell of a lot more money in return - enough for literally hundreds of pairs of shoes and a whole herd of ponies. And, frankly, the changes he was proposing wouldn't nearly compensate me for the drop in my quality of life.
Hopefully when I explain things in those terms, my priorities make sense to you all. But perhaps you think because fuzzy concepts like personal pride and job satisfaction are involved, that makes Snowbooks more of a hobby than a real business. Commercially-run companies have commercial goals, don't they? And heartless old economics tells us that if your employees are happy, you could get away with paying them a bit less.
I think most of us are just not used to the idea of ordinary firms having non-financial goals. It doesn't seem right. The typical lifecycle of a growing business eventually sees it trading its shares on the stock market - and at that point its shareholders are interested in it purely as an investment. There are a few companies that are owned by their staff, and they tend to place some emphasis on employee satisfaction. But most big businesses are owned by stock market investors and so 'return on investment' is their guiding principle. And that's the world Snowbooks exists in. Our competitors are companies whose first and only priority is financial success. Which leaves us at a disadvantage, since we're also relying on financial success to keep us going - only we've burdened ourselves with all these extra, non-financial goals. If you think about it, for us to stand any chance of survival, we actually have to be more profitable than a comparable firm with lower salaries and a clearer profit motive, because we're planning to 'waste' some of that income before it reaches the bottom line. We have to try harder because our profits have to go further.
So that's exactly what we do. We innovate to an extent that's frightening in a traditionally conservative industry, and we take advantage of every piece of big-business best-practice that we can, even though firms our size are often working off the backs of envelopes. We have state of the art IT - beyond state of the art in fact, for publishers. Our processes are better than anyone else's. Our lead and turnaround times are a fraction of our competitors', our standards are higher and our unit costs are tighter.
I've heard the phrase Our People Are Our Greatest Asset so many times from so many firms who didn't mean it that it tends to make me feel a little bit queasy. But not only do we pay over the odds; we've actually structured our firm to make the work more satisfying. Each project manager follows one book through from acquisition to publication - overseeing everything - so that when they hold the finished paperback in their hands they know it was them who turned it from a scrappy manuscript into a successful title. Understanding exactly what you've contributed and being able to hold the result in your hands is a big part of job satisfaction. We even let each project manager pick their own books, reasoning that if you have to live with it for the next year and a half, you'll only pick titles you love and for which you have a genuine passion.
Naturally our jack-of-all-trades approach sacrifices the production-line efficiency of Frederick Winslow Taylor and Henry Ford on which most modern business is based. But so far we've found that talent and motivation trumps over-specialisation and functional silos every time. The average age of our team is twenty-five and each of them can not only manage a title through to publication, they can perform every task along the way. No one in a traditional publishing company can do what they do, not as fast, not as well and not without a team of people working for them - and certainly not at age twenty-five. And what's more they know it. They know that at their age they have as much experience as a department head in a larger firm.
Which makes me feel good. I'm treating my staff better than I was treated at their age and they're responding by beating my expectations of them.
Now as you can imagine there are all sorts of problems with our approach, for instance it's very difficult for us to have a focused list of titles - say all crime or all business books. But we worked out in advance that the customer didn't care which publisher's brand was on the spine of the book they were buying. Only the retailers cared, because each of our books was the province of a different buyer. So we did something that retailers tell us had never done before: we put together sales packs that provided each buyer with the exact information they needed to make a decision on our books. It sounds totally obvious, but very few publishers understand the book business from the retail buyer's point of view. I had a slight advantage in that I used to be one. So when we presented our first sales pack to Waterstones, their buying manager was so delighted that he told me none of their other publishers had ever provided that level of information.
I'm telling you this not because I hope it will impress you, but because it illustrates how breaking the rules can be a good thing. I have an unconventional view of success and if I want to achieve it then I have to take an unconventional view of running my business. Because my goals are less commercial than other publishers, my tactics need to be more commercial. It's hard work having warm and fuzzy values because they cost money, but I happen to think they're worth it. For me, any victory would be hollow if I achieved it by breaking my own rules about what's important.
Each of you will have different views on your responsibilities as an employer. And you'll have your own personal definition of success. If those views happen to mesh well with the culture of the companies you currently work for then you're on to a good thing. If they don't, I would strongly urge you to spend some time thinking about what matters to you.
I couldn't find a workplace where the culture fitted me well enough, so I created my own. If I'd stayed where I was, I might have been successful in the eyes of those around me, but since it wasn't my definition of success, I wouldn't have found it satisfying. The money would have been nice, but I'd never get those years of my life back. This way I don't have to put off being happy. I don't have to make a deal with myself, where I tell myself that the next promotion or the next pay rise will somehow make up for feeling frustrated and unfulfilled. I'm doing what I want to be doing each day. So I'm not counting on my future to make up for the present, and that takes a lot of pressure off me. It also means - and you might have to take this on faith if it sounds too outlandish - but it also means that even if Snowbooks goes under, I'll still consider that it was the right path to choose. I'll be able to look back on it all, however it turns out, and say that it was an adventure worth having, that I did it for the right reasons and that I treated those around me decently, even when I could have got away with less. That happens to be my definition of success: something I'll be glad I did however it turns out. And I would humbly suggest that you apply a similar definition in your own lives. Thanks for listening."
Emma