Wednesday 10 January 2024

What Makes A Good Business Mentor

What Makes A Good Business Mentor?

Mentoring grows people by Richard Gourlay

Business mentoring supports people at all levels of a business. It used to be seen as supporting people in need or going through dramatic transition, but is now recognised as a key support element in people development throughout progressive companies. Business leaders benefit from mentoring programmes in a number of ways, as do the company's they work for. 

key benefits from mentoring include:

  • Confident motivated leaders
  • Reduced churn of senior staff
  • Higher employee engagement 
  • Succession planning  

  • Increased productivity  


Being mentor is about more than just having some experience in the field, although that helps, as does being genuinely interested in the people and the challenges they are facing today and likely to face in the future within their role. 

Mentors have to bring more than just experience and know-how, they need to have energy and be able to transfer that energy and enthusiasm to their mentees.  Mentoring requires a positive attitude to enable mentees to grow and develop faster than they would organically in their role. 

Mentoring Value

Mentoring adds value to companies through a whole range of added value reasons, often unseen on the profit and loss account, but scoring highly on the balance sheet. The above list of key benefits is a good place to start with do not show up on a P&L spreadsheet, but do when you look deeper at the balance sheet. 

Confident leaders are essential in business today. People who make the right, often tough calls at the right time on where and when a business should be going. Likewise reducing staff churn, and especially senior staff churn is vital for a business to be able to succeed, with replacement times and costs impacting upon corporate capability. That itself links directly to levels of staff engagement, for example high churn reduces confidence and engagement levels as rapid unplanned change unsettles entire working environments and ecosystems with customs and suppliers. That also connects a direct link which uncertainty brings to the lack of planned succession planning and its impact on increased people churn also damages productivity as well as purpose and accountability.  

This cascade effect impacts upon a company's culture. For many leaders and senior people within a company todays' workplace can be an isolated one. Work from home, delayering, global disparate teams where connection is via email, text, business call or online meeting and the odd and infrequent face to face meeting leaves many senior people emotionally alone. Mental health and team culture are an important element for leaders to be engaged with people.   

Mentoring Supports Positive Growth Mindsets

Mentors provide several great assets to a company, one of the least appreciated is the outside view. That is the non aligned, impartial neutral viewpoint. This provides the rationale voice to someone who is being mentored, removing or at least balancing up internal company or personal biases which might exist in the decision making process.  

When leaders look for growth, often it is through an internal prism which is not reflective of reality. The external mentor should be able to provide insight, balance and motivation to the individual as to how they can grow as a leader within their business. 

Good mentors should look to deliver a positive mindset in supporting their mentees grow and develop. Being realistic with them on timescale by setting horizon goals rather than sprint finishes.  


People grow over time, so good mentors develop a clear understanding of how to support that growth and supporting it into new areas, enabling mentees to succeed outside their comfort zone by taking on new challenges, developing new skills with enthusiastic and measured support of a good mentor.  

Creating a 'can do' attitude encourages mentees to develop the complete set of skills rather than just reenforcing their existing skill base. That enthusiasm is about developing and supporting people with a purposeful plan of support.  

Mentors must be able to communicate clearly 

Good mentors are real listeners, not only listing for what is being said but also what is not being said. Growth of people requires mentors to focus on the whole picture not just the good bits. Learning from failure is an essential part of knowledge transfer, so good mentors don't brush that under the carpet.

Leading mentees to the answer is where they learn, but that only happens when mentors are good listeners. If all they do is regale stories of their successes or agree with their mentees, they maybe great people to have beer with but are they going to grow their mentee into an even more successful leader? Good mentoring is all about listening, qualifying and then leading their mentees to the answers they need.

It's not about telling or selling, but about supporting leaders learning. The best mentors can break complex situations down into simple decisions, pulling out the critical from the noise and irrelevant, helping mentees learn how to distill situations down through objective analysis so that hey discover the solutions by themselves. For experienced business people to mentor it is always too easy just to give them the answer but without the learning their is no lasting value in just the answer if they have not learnt how to achieve that outcome themselves.

Honest is at the Heart of Good Mentoring

It's easy to be nice, but better to be honest with people.  Even when it is phrased in a positive sandwich, good, could have done better, but that part was good. Good mentors should not be trying to be popular, they should be shaping their mentees understanding of what is good and what is not. 

When a mentee makes a mistake, a good mentee will draw out the thinking process and the decision making rationale and identify the consequences, while the average mentor will want to draw a veil over the topic as quick as possible and move on. But there is no learning in moving on. The learning comes form the self assessment, not being told, but the self analysis of the whole process not just the outcome. It is the thinking process that the mentee went through which they need to review if they are going to learn and not just repeat (or avoid) the situation next time.  

Good mentors ask good questions, not just he obvious ones. They get to know their mentees and and get them thinking outside their usual thought process patterns and challenging them to look at themselves and others through different lenses.

Mentoring Shapes Leaders

Good mentors bring their skills and knowledge to the table. They share insights and do background research on their mentees. They are there to share and shape the mentee through positive engagement, providing a sounding board and a springboard for the mentee. Somewhere the mentee is safe to discuss key issues them without judgement and who they can develop a positive relationship with that grows the mentee successfully.

For a mentor making a difference to how someone approaches and deals with their workplace issues is the outcome from their work, developing a new approach, or a different viewpoint moves a mentee into a new place which they would not have got to without the mentor.  

Good Mentoring 

Good mentoring grows people to succeed. I hope this article shows you what and how good mentoring delivers to people, the mentees and to the business who supports and champions mentoring ship within the company. Like to know more about mentoring by Richard Gourlay then get in touch for an informal first discussion: Richard Gourlay 

Tuesday 1 February 2022

What is a Good Leader?

What is a Good Leader?

When people talk about leadership they are often talking about the title or the personality of a leader. But real leadership is about a set of behaviours which we see and value in others, and can exhibit ourselves.  Real leaders lead not because of their title, but because of the authority they develop in others.  So, what is a good leader in business today? 

LEADERSHIP QUOTE BY SIMON SINEK, quoted by Richard Gourlay leadership #mentor #leadership

Lead Yourself to Lead Others

Leaders today are selected not from the oldest or those ‘in favour’, but from those whose behaviours reflect the values the business believes in. Successful leaders exhibit their leadership traits through their behaviours and actions which people chose to follow. These behaviours are seen as a set of value-based leadership skills. True leadership is therefore earned authority from your peers. 

What people stand for and how they behave therefore matters in assessing people’s leadership skills. 

Doing the right thing even when no-one is looking, is an excellent first place to start when looking at a leader living their values. How you lead yourself is the first and most valuable assessment any leader can make.  If you cannot lead yourself, how can you lead others?  

How you lead others therefore often starts by looking at how you lead yourself, with self-reflection. Do you as a leader look to find multiple viewpoints from across the organisation, or do you bunker-down with a few trusted voices?  Bringing in balance and inclusion is the most successful way to gain a complete understanding of potential outcomes of any critical decisions. It is also the most effective way to carry people with you as a leader, especially in today’s flat, diverse and skill centred organisations.  

Confidence and Humility 

Demonstrating your self-confidence in your abilities while simultaneously recognising and confronting your limitations through mentoring and coaching in developing those additional needed skills as well as counterbalancing them through a balanced team skillset is also vital for successful leadership. Leaders must be seen as human and recognise what being human means in their leadership.

This humility factor in acknowledging the whole team contribution in everything you do, is seen as a vital leadership skill in todays’ workplace.  Leaders who genuinely value their team create a positive team culture build stronger organisations, which both trust and enable people to dream, do and become more. In cultures such as these the leader becomes invisible as the culture becomes the defining driver of success. 

Successful Leaders Create Leaders

Successful leaders develop people who follow them, not obey them. In many of the most successful cultures leaders want people to challenge them as this makes decision making more robust and sustainable.  Inside positive leadership cultures there are often many leaders, leaders are trusted and respected, and often sit in various roles within the organisation.  

Leaders must also create collaboration and cohesion within their team to build in all the skills the leader will need to succeed within their role. Finding and pulling together the right group of people to create a winning team requires creating a common vision of where they are going that brings together the 3C’s of cohesion co-operation and ultimately collaboration.  

The process of collaboration maturity recognises the need of co-ordination of disparate people who must co-operate for mutual benefit and then will actively collaborate to achieve a shared outcome they could not achieve without each other. Collaboration maturity occurs as the team embeds this relationship into a single operation respecting and valuing each elements valuable contribution.


Leadership Model


Strategic Responsibility

Ultimately leaders are responsible for everything that happens within a company.  They are solely responsible for setting the direction, the strategy, and the prevailing culture within the organisation. That ultimate responsibility leaders must develop and own. They may take advice but they cannot look elsewhere for responsibility for the strategic decision making.   


Leadership Behaviours 

Leadership is a set of personal attributes which inspire others to behave. While leaders need to remember their humility, they do also need to adapt their leadership style to respond (or drive) situations. Leadership styles must also adapt to whom they are leading. Different people respond to different situations.  The idea that one style of leadership will work in all situations, is not true. 

Leaders also need to flex their leadership style based upon situations. While the humble leader is the ideal, it will not work with all people in all situations. So, leaders need to be able to create and deliver influence across all their spheres of influence. Leaders must adapt their leadership style both to influence diverse audiences but also to deal with the situations they face. 

Situational leadership is as much an art as a science. Predicting and reading situations is a learnt skill which leaders need to develop over time and through situations. Either through shadowing roles or through scenario planning being able to stay objective and understand what situational leadership skill you need to deploy to achieve the required outcome takes time to learn.   While each leader has their natural style they must also be able to adapt to motivate different types of people and different situations, moving from reflective / humble leadership styles to directional and pacesetting when needed.

Leading People 

Creating and leading teams of people takes time and effort. Team building was often seen as the occasional activity to bonding, recognising, and rewarding.  Today team development is on ongoing exercise, not the once-a-year review, but a continual mentoring approach supporting people develop and evolve into their role and through their role as it evolves over time. 

What used to be called Forming, Storming, Norming and Performing function of team building has been replaced by the view of continual team development. It is a supportive process that supports everyone as individuals, small cohorts as well as whole units to excel within their environment. Leaders today must now focus on barrier removal and building resilience within their people and teams to enable them to achieve their goals. 

The focus today for leaders is on outcomes not outputs. It’s easy to be busy, but to achieve planned and desired outcomes as bottom-line results teams require leaders they can trust, who are accountable, provide commitment and remove conflict. 


Successful Leadership 

Leadership is like any skillset, it can be learnt and developed. It is best developed within the culture of the organisation within which that leader will emerge as a leader within. But it does not have to, and often bringing skills learnt elsewhere is a great way to develop new leadership skills within an organisation. Becoming a leader should not be the end of someone’s development, but the start of their leadership development. 

If you would like to know more about how we help leaders lead, then get in contact with us here Richard@cowden   


Thursday 22 July 2021

The Skills Needed In Being A Company Director

#directing and #leading a #business #forward for #success
The Skills Needed In Being a Company Director 

The Skills Needed In Being a Company Director

Having director in your job title is highly desired, but few people thing about what it really means. Apart from the legal responsibilities and added pressure of running a business, it is also a difficult role, often with little or no training or support. Suddenly you are in charge of everything, where the buck really stops, and everything you do is observed, judged and analysed. The decisions you make dramatically effect the whole business, and often or not not making a decision has the biggest impact upon the success of otherwise of a business.     

Directors have many roles to take on board, from leading the whole operation, the big picture of where the business is going, through to working with other senior people and ultimately taking ownership of achieving results. Directors are also responsible for taking charge of staff, developing and implementing succession planning and being seen as the public face of the company, directing is an all encompassing role requiring new skills to ensure success.            

Directors are ultimately responsible for all elements the business, not just the bit you like and know well. Being a director is about owning the whole operation. 

Director 100 Day Challenge 

Directors and owners of business are also responsible for taking ownership of where the business is going. This often overlooked role is vital, the 100 day challenge often determines success in publicly quoted companies (FTSE 100+) but is true in virtually every company. The director 100 day challenge is where a new leader has their business honeymoon. But it is not the time they get to settle in but the time they get to come up with the future of their department, their team and ultimately the business.

This is the window of opportunity directors and new senior people get to start to lay down where they are going and to turn their promise into a tangible vision of where they are going to take the their division or business during their tenure.  During this small window they have to connect and built their leadership team, secure existing roles and outcomes, meet the stakeholders to reassure and listen to them, as well as start to formulate where they are going. 

That window of 100 days is given to them to allow them the space to take ownership of the role. It allows leaders to get their feet under the table, assess what is really going on and who is whom within their organisation before making any real changes. The need for change has already been explained to them, that's why they are there, but what, how and when is left up to the new leader to assess and implement.  

What is the role of being a company #director by Richard Gourlay, what and how to be a business director

Directing is a Difficult Job

Directing is a difficult Job, rarely supported or understood. It is very different from being a manager, yet the most common people promoted up to direct companies are good managers. Yet the roles are very different, directors create and direct the plan, managers manage the delivery of the plan.  

The key questions every director needs to answer and keep asking and answering are: 
  1. Where are we going?
  2. Why? and finally 
  3. What is my plan to get us there?    

For every business, for every department having a well thought out detailed and deliverable vision is the single biggest role anybody in a leadership position must have and be able to create and deliver effectively. Knowing where you are going is the key role people look at leaders to deliver.   

For a director it is about making change happen to deliver tomorrow's results.  Directors must lead the organisation of where they are going. That means making tough decisions about what to focus on, who is going to do what, or even stay in the organisation should that be needed. Some decisions are therefore tough job in making change happen.

If a director has no vision for their business, how are they and the people they lead going to find their way?

Determining the direction of a business with a clear vision is down to the director to achieve developing and being able to communicate and convince people of where and why they are going in that direction. people like Steve Jobs developed his clear vision of the future in the same way as Graham Honeyman who turned Sheffield Forgemasters around in 6 months from a loss making business into one the world's finest high-value steel makers and went on to grow it through his clear vision and leadership. 
It is difficult to lead successfully with a clear vision, supported by a demonstrable plan to turn its into reality, fail to plan and you are left with a dream of what might have been. Fundamentally it is up to leaders to make things happen and lead from the front towards that goal.  

"If you don’t make things happen, things will happen to you"Lanes Company

For Directors Standing Still is NOT an Option

Role of being a director, requires directors to have and deliver change and a successful business plan by Richard Gourlay

If anything happens it is you who is being viewed as to your response, assessed and judged. A do nothing approach to the directing role is seen as abdicationwhile the Don't Panic Carry On approach leaves everyone wondering what your role is. 

In every sector of every business the only certainty is CHANGE. Are you at the forefront of that change or follow that change, but you cannot ignore it. Someone, the person in charge, has to move that business forward.       

"Every time we've moved ahead in IBM, it was because someone was willing to take a chance, put his head on the block and try something new."
Thomas J. Watson, executive

To make change happen, you need to plan it out and engage with everyone so they know not only what they are doing differently and how, but most importantly of all why. 

Why standing BACK is vital for Director Success

To go forward successfully then firstly step back and give yourself some space and time to  see the big picture of where your markets are going and where you want to take your business. You need to remove yourself from the fighting in the trenches role of day-to-day business so you can start to evaluate where you want your business to go. 

Use appropriate planning tools to assess your position, your options and the opportunities available to the business. If you need to know more about planning tools, then drop us a line (click here) and we will be delighted to discuss your needs.  

Good planning does not only see what's in front of you but also sees beyond the horizon of where your markets and industry are going, so you can start to see the foreseeable future, with various degrees of confidence. Turning dreams into reality, from Steve Jobs to Graham Honeyman you have to have a dream and create a workable plan to turn it into the reality you can deliver.

"So many of our dreams at first seem impossible, then they seem improbable, and then, when we summon the will, they soon become inevitable."
-- Christopher Reeve, Actor

Looking to learn how to take the guess work out of your business success? Then get in touch to discuss your development programme, click here: 

Directors role documents from Business link 

Contact Cowden: @ Learn more about Richard Gourlay

Role of being a director by Richard Gourlay NED and business advisor

Wednesday 21 July 2021

SaaS Strategy: Where are we Today, and which Pricing Model is Right for you.

SaaS Strategy: Where are we TODAY, and which Pricing Model is Right for you NOW? 

Back in 2012, I wrote an article (on this blog) about the potential future of business in the internet age, called The Internet Tsunami. Back in 2012 as we emerged from the infancy of the internet I stated that the internet would become a major business channel for all business sectors not just music and insurance. It was no longer a passing fad.  Back in late 1990's we saw the internet emerge from having been a research tool to something which people could experience through to the boom of the early 2000's when money flooded in to this emerging market but the infrastructure and customer engagement platforms were not ready preventing online becoming more than a side show for businesses.

After the financial crisis of 2007/8 as the economic bounce-back accelerated change in the economy opening the door to the internet age and it began to take shape. My article in March 2012 suggested that what we were seeing the beginnings of the permanent change across all sectors and markets, it was not just Amazon replacing CD music shopping, but that the world was going to change. 

The SaaS Tipping Point 

The technology tipping point has occurred and it has become the dominant force in driving consumer behaviour. This paradigm shift is when markets move in response to macro factor drivers. For companies going too early with any trend they commit in concrete to a technology which leaves them left behind as the internet evolves (for example Friends Reunited: no interaction and on-going relationship creation, as Facebook found is what makes a successful online social media platform), go too late and you miss the market move and find out you have been left behind (Comet sold electrical white goods and collapsed with over 20% of the UK market share through its 200 stores, but refused to see the move online for these goods by younger consumers, while Amazon at the time had already achieved 8% of the white goods market with no physical shops). 

If you can see a trend you have already missed it.  Once the tipping point has been reached in any trend then you are playing catch-up. So over the last 9 years the internet has not just become another channel to market for many goods, it has become the dominant channel for many sectors most noticeably in retail, but is now almost ubiquitous, impacting upon every market. 

The ability to take products and services online is now in full force with organisations inventing themselves, reinventing themselves as online (SaaS) business models. For many this is a result of a number of key factors, not least is about keeping up with your customers and the competition. But, other key factors such as the reduction in cost of developing online services, as well as the ability to upgrade services quickly in response to rapidly changing or evolving customer demands are other positive drivers of moving online.

Making the shift to go to a SaaS solution is a strategic one, it should be based upon a clear strategic assessment of the market and customer needs and carefully planned out in a detailed business plan.   

Software As A Service SaaS 

Software as a Service (SaaS) solutions are now common across all sectors replacing manually made service offerings. For many businesses replacing, upgrading and being able to compete within their sector requires companies to move to SaaS offerings. Either bespoke designed SaaS from scratch using in-house or outsourced technicians or tailored from white label sector providers. Offering a SaaS solution to a market is not just a shift change in what an organisation offers but a whole new way of thinking. Too often taking the product online is seen as a cost effective way to compete, or stay in the game as others do, or as a way of trading without barriers expanding the brands reach in an internet dominated world.

SaaS though is more than just simple a move online.  It requires a different way of thinking from traditional models. The changing nature of customer engagement, moves from the physical meeting to the online engagement, that requires companies to think and act differently. The nature of the service also changes as it becomes totally arms length customer centric. Customers choose when and what they want to use of the service (for example over 2,700 UK people did their tax returns on Christmas day in 2019, with over 30,000 doing them over the Christmas holiday period in 2019), this requires companies to resource supporting users when they need it not when you are open. 

Business to consumer SaaS models need to support consumers with planned engagement and support channels as well as developing SaaS loyalty strategies in place to retain and develop customer segments. For B2B SaaS models working across partner channels puts a set of different requirements in place in accessing target audiences through integrated service offerings through integrated software .

SaaS behaviours also require business to measure very different metrics to be successful,  many of which are new to companies not used to SaaS solutions, but if you do not measure them SaaS will fail to deliver the results you expect.  Here are some of the key areas for SaaS businesses to monitor and drive decision making from.

Successful SaaS Solutions Start with Minimum Product Viability (MPV)

SaaS achieving its Minimum Product Viability MPV is an essential must have which is not often measured early enough. The principle idea which business leaders are told is that with SaaS 'build it and they will come mentality," but they won't if you don't compete.  Just being an online service does not make your product achieve success. So MPV is often misunderstood as do what we have to do to be a player within the market. 

SaaS MPV metrics need to be clearer. If you take your service online is must do more than exist. Now I am not saying it needs to be perfect, over-polishing a SaaS solution is one of those very dangerous assumptions we will come onto shortly, but simple migration of a product online is not a SaaS MPV.  For Minimum Product Viability to be achieved a SaaS solution must actually compete within the market. It must win existing or new customers for it to achieve MPV status. Too often the model of lower cost looks good on paper, to the accountant, to the competitor analysis and trend analysis but without actually being able to win target segment customers.  

Built and they will come mentality often leads to the knee jerk reactions from companies to offer discounts to customers to gain traction. The downside of that is that the predicted margin gains aren't met and if you give it away, customers then do not value it so engagement is low, and the other major problem is that once the opening price is set to gain traction particularly form early adopters who usually are premium customers,  it is difficult to recover that market price unless you have large marketing budgets to support the opening offer discount.        

Measuring MPV requires leaders to not only check it works (and that is never a given with IT) but also that it achieves MPV as an offering. Does it do what it needs to do for the customer.  Does it meet the complete customer requirement of the value proposition, so do not just focus on the pure IT but on the whole value proposition to measure the MPV status. Test it with pilot groups, measure not only it looks good, but does it replace what they were doing? If not it needs to do more.

SaaS Solutions Being a Disrupter

To achieve SaaS MPV, a solution must disrupt the structure of the existing market. Being a disrupter within a market sector was easier with first mover advantage, but now in virtually every market that has been lost, SaaS solutions need to use the whole marketing mix to achieve MPV and not rely on opening offer pricing. 

Disrupting any market requires your SaaS offering to target and penetrate precise target segments and disrupt the existing market.  Focus on measuring the disruption your new offering is causing. Are you reaching your core target audience with your new offering and taking customers from the competition, or protecting your vulnerable customers with you new offering. Disruption is about changing people's perception and behaviour patterns. So it is important to measure the existing behaviours and their new behaviours using the SaaS solution. 

Just shifting your existing customers online maybe a strong defensive strategy if your are the last to move into SaaS, but that is not a disrupter. To disrupt a market you have to do something which changes the game. Changes the structure, the dynamics and the value proposition within the target audience. 

SaaS solutions MUST do MORE

SaaS solution need to offer more to customers within their sector. Providing a bigger solution, not just to the existing need but to wider segment needs should be built into the SaaS solution. Even if not a MPV points the potential to move online must drive engagement, through community, through advice and support to enable SaaS to add real value to target segments. 

Building more into a SaaS solution can be undertaken at low or no cost if planned in early, and is essential. SaaS solutions need to build in evolution so that they can evolve in response to customer evolving demand, competition short-term and long-term responses and to life-time evolution needs. Being able to add in and evolve a SaaS solution to a complete solution is essential so it offers a complete long-term solution, not just a quick fix. That requires several micro launches, (evolutions) to meet theses needs and to enable the SaaS solution to add more value (value proposition). 

Measuring why, where and who is using the site for what as well as forums and associated features will tell you the full value you could, should and must offer. Often support functions such as help desks, brochures, technical information, support functions as well as best practice and associated activities are always areas where doing more can be seen, but only if you measure it! What about training and certification of users and channel partners, and the whole range of other activities which these intranet offerings can also provide?

SaaS target the right segments.       

Moving to SaaS is not a straight line. Build - test - launch sit back and watch them come onboard is how SaaS is sold to CEO's in shifting to SaaS solutions, but that is not how SaaS adoption works. Adoption curves matter, so identifying who and when segments will move over to SaaS solutions is vital and plan out the adoption by target segment.

The challenge is that the key drivers of SaaS solution within an organisation comes from specific segments and so migration plans need to be reflected in the SaaS rollout and marketing adoption planning.  Adoption curves for SaaS should be planned in early so that realistic and appropriate marketing for SaaS solutions inform and determine metrics of success.    

Who are the core target segments that SaaS solution should be targeted at?  This core question is often lost in the generic answer everyone! But it is not. SaaS solutions must add value to everyone, but they must be focused on converting the businesses strategic target audience. That focus must be at the heart of the SaaS solution design and implementation, if you win more great but your focus is to move the brand's customer base. 

For success SaaS solution moves the brand's position, its profitability and its performance by acquiring new higher value customers. Higher value customers in both B2B and B2C environments for mainstream players are usually found higher up the adoption stream. So laggards find growth in volume and value in teh late majority (see below for market adoption curve and total market size modelling). Late majority players can already win downstream laggards but need to expand by either growing with their sector or by moving into early majority customer segments, and likewise early majority customers look at high value (but smaller total volume) early adopters. 

SaaS solutions adoption curve defining your market by Richard Gourlay

The key measurements here are to identify the precise target segments you intend to win, and measure that  as your metrics of success. Do not just measure total customers as this can inflate your SaaS success. While total numbers always looks good, it mayn't be profitable and can often lead to SaaS platforms being pulled into chasing total numbers not focusing on developing profitable long-term customers. This is typically seen when a new SaaS platform has to buy its customer growth, so people see the growth as success, but it can be boring through their cash reserves as they have focused on the wrong metrics. 

Profitable target customers support growth of a SaaS solution must be measured to see if the strategic goal is being achieved. 

SaaS Pricing Models

There are several ways to price your SaaS solution which we are break down into 5 key models, each reflecting the market your SaaS operates within, your competition and the solution you are providing to whom. Here are the most effective SaaS pricing models and the pros and cons of each with their key features::-

1. Flat Rate Pricing

The most common and simple, often replacing a previous non-SaaS solution. It is simple and effective, easy to use price to incentives by allowing target audiences to compare the value proposition. The difficulty in this model is that it is difficult to add value to target audiences, such as high-use or high-value customers. Some SaaS pricing models then try to add premium models to this, by adding a second solution to enable extra features and pricing to the offering, but this often creates technical and is difficult to migrate customers across to. 

2. Usage Based Pricing 

Usage based pricing is popular and provides an ideal way to price your SaaS solution. It enables pricing scaling, the more your company use, the more you value you consume, the more you pay. It allows low cost acquisition and then scale-up in pricing towards target audiences. This also enables additional levels to be added and funded through growth as usage drives demand.  Usage based pricing also reduces and often removes barrier to entry as the SaaS platform accounts for a wide-range of customer segments, from new entrants through to high demand heavy user groups. 

Usage based pricing does have some limitations. The moving up levels (and down) can be challenging for customers to see what they get for the price they pay. The key area of concern for a SaaS Solution using this model is that monthly revenue, a key metric will vary and is therefore not popular within the sector as predictable revenue is often a core demand for investors.   

3. Multiple Tiered Pricing Models

One of the most effective models as it allows the SaaS platform to be priced to target audiences using tiered pricing. Tailoring different packages around target audiences enables the SaaS platform you can appeal to multiple audiences. This has a key second advantage in revenue generation as you maximise revenue across all channels to market. It also allows simple clear and honest upselling opportunities as well as add-on pricing with new features/levels being added in response to changing demands. 

Key factors to be be aware of here is having too many pricing levels. Just because you can does not mean you should. 3 is optimum and 5 is often seen as maximum, the more you add the higher the abandonment rates and the lower the effective of marketing campaigns. 

The idea of dynamic pricing, too many tiers leads towards a platform that looks like usage pricing which dilutes and degrades the tiered pricing focus on key target segments, vital for strategic success of a SaaS solution. The other downsides of too many packages is that trying to over target segments damages the focus on the tiered model, confusing customers through too many choices and damaging price effectiveness by not reflecting tiered pricing to deal with heavy use customer groups.   

4. User Pricing

The fourth pricing model moves away form company wide pricing to the end user. This model is ideal for many sectors where simple pricing wins customers over. Wether that is a fixed annual or monthly fee, its simplicity and logic engages with SaaS platforms whose offering of a direct pricing model allows customers to sign-up as individuals. 

User pricing is popular as it is predictable in income and scales easily with numbers. This predictability makes it popular but needs to be internally measured by usage by individuals to see what value they generate from the platform. 

While simplicity makes it popular it is also its major limitation as a pricing model. Per user charges means that there is little opportunity to get group buy-in as one person can use the platform and share the results. The inability to signup whole teams as one limits routes to market through channel partners. It also means that churn becomes a major factor as it is harder to control churn as people relate use to value as an individual.    

5. Active User Pricing

Is a variant of of user pricing but works by charging for people actually using the SaaS platform. It is seen as excellent value for money as it removes risk for purchasers as sign-up does not cost. This drives engagement and adoption as it is only usage which is charged.  People can sign-up but do not pay until they actually use the platform, it is ideal for enterprise business models. 

The downside of active user pricing is that it is difficult to grow outside specialist enterprise areas. Often premium priced as a live service it is difficult to encourage widespread adoption with teams or across sectors.       

6. Per Feature Pricing

One recently developed and rapidly growing variation on this theme is called per feature pricing. Customers of businesses pay a subscription fee, a base fee with limited functionality which achieves MPV and adds value and then differing premium priced add-on features which either replace the need for multiple upgrade options or allow a SaaS solution to adapt with its own specialist feature cost model expansion. 

This model encourages customers to upgrade to unlock additional functionality which allows segment specialisation and directly relates those functions to direct costs.  This per feature pricing model allows sites to know their operating cost models and revenues of the base model, and enables cost scaling for bespoke areas that may take significant resources to develop. Sub-segmentation by feature is popular as it allows cost to value to be direct and then reverse rolled back into the SaaS site as it evolves as a cost-free upgrade.   

The key challenges of cost per feature pricing is that SaaS solutions can be pulled by small segments away from their core model to meet these minority groups. The other challenge of per feature pricing is that of customer frustration as key features are at a premium.  

7. Freemium Pricing

Saving one of the most popular and misunderstood to last is the freemium model. This model allows customers limited functionality the SaaS solution platform for free. This enables mass adoption through any market of the SaaS platform with a clear level of functionality which buys users in. It is ideal for large volume platforms such as social media channels as the model removes the key hurdle to volume customer acquisition. 

Freemium  gets customers bought in for nothing as there are no barriers to entry and this supports rapid expansion through and across channels, but it does limit value adding at the freemium level. Encouraging customers to trade up and use the additional chargeable features is teh real challenge  

Revenue is the real looser here for companies. This makes it less popular with funding parties as conversion to revenue is undefined within this model.  To fund freemium SaaS models multiple funding systems are often adopted, such as smart algorithm advertising which is an ideal way to fund expansion.    

With freemium sites high churn rates and low loyalty rates are major drain factors to this model, both of which make traction and the ability to encourage customers to upgrade difficult. Funding to support the core functionality is often under pressure to keep it developing and engaging with the volume of its core customer base. 


SaaS solutions are now mainstream to nearly all business and customer segments. Being mainstream though does not mean that the risks have disappeared, in many ways they have increased as expectations have accelerated as audiences demands have risen.  

Whichever SaaS pricing model you adopt understand that they all come with risks which need to be understood and actively managed within your planning.  

SaaS solutions must be part of a strategic process for leaders to understand and deal with. One area that many leaders do not fully appreciate is that building an experienced SaaS team around them is a prerequisite for success.    

Learn more read further blogs or get in touch to see how I can assist you.

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Thursday 1 July 2021

Why Plans Don't Work: And What To Do To Make Them Succeed

Why Plans Don't Work 

Why Plans Don't Work, 

Here's Why And What To Do To Make Them Succeed. 

Leaders often say they have a plan, it can be written down or in their head. Sometimes they have great names, from action plans, to project plans, to business plans.  When I visit clients I am often presented with plans, ideas and concepts all in some state of existence. Some are online share documents with many contributors, several revisions and are carefully annotated graphs and charts, others are glossy brochure plans with pull out action and implementation plans.  
But Plans don't work!  A plan of any kind is just some works (images graphs etc) to make change happen. But plans do not make change happen. Plans only show the steps to make change happen. To move the company from where it is today too somewhere new. But that does not make change happen. That just moves people out of their comfort zone to somewhere where they are not comfortable.  

Habits Matter More Than Plans

Plans make change, but don't make change happen.  ITs what happens next that matters if plans are to work. Taking people somewhere new is interesting but getting them to stay there and thrive is the real goal of any vision. It is the afterwards that matters if change is too be sustainable. If you want people to perform in a new way it's making those new ways their habit that matters.
Habits matter because that is where change becomes the way. Habit is what matters in making change happen. The biggest driver of people's behaviours is creating new habits, but these do not feature in business plans. Habits are very powerful but business plans, action plans and implementation plans fail to have habit forming built into them.      
Habits are why people do things. Habits are why people are reluctant to implement real change. Habits are the most powerful driver in people's behaviour. Habits are often more powerful that people's desire to succeed in making change happen.  Employees are often open to change until it becomes something they have to do differently to their habits. 

Plans Fail. 

Habits are a lot more powerful than someone else telling you to change. This is why plans fail. Even if people see change as necessary they will agree that change needs to happen they often fail to embed it, preferring to go back to what they know, like and have always done, they kept their habit. 
"Plans change processes but fail to change peoples' habits."  
Changing habits needs to be built into a plan. The changing habit phase is rarely, if ever identified until after the plan has failed to succeed. Look at why plans fail and the most common and frequent reason given is the failure to change peoples' habits in implementing change. 
Creating and sustaining change requires plans to build in habit changing as part of culture change. Habit changing     takes time and needs to be planned out over the long-term not a short-term fix.  A plan saying we will change this process next week, is unlikely to succeed if it has been around for a period of time and is part of people's habits and is supported by the existing culture. 

The Power Of WHY

Simon Sinek has outlined the importance of why change is being made as a driver of supporting change. Leaders' must provide context, the WHY change is happening not just WHAT and HOW. The power of why is an essential underlying rationale which changes the relationship between leaders and employees, buying them into the strategy, rather than them being kept in the dark on a need to know basis of information.
Leaders need to understand that plans don't work, but people do when they are doing something they love, in a way they control for a cause they believe in.  
Plans are meaningless unless they carry everyone to somewhere they can create new positive habits. When you remove those habits you alienate your people. 

Changing Habits Takes More Than A Plan

Here are a few ways I have found to make plans really work, to get them beyond the page, implemented, and embedded with new habits in place.

Leadership Behaviours

]Leaders needs to act as ambassadors of change and provide new habits for people to adopt and ideally develop their own new habits within the new model which the plan determines.  Leaders need to proactive lead from the front in creating a new culture, being and developing role-models of the right behaviours and habits in each department so those role-models can be seen and modelled against.   

Recognition And Reward

Recognition is also a key element of habit forming, recognising and rewarding the right behaviours is central to bring the new way of working. Too often leader's spend too long penalising those not doing the right stuff rather than focusing on people doing the right behaviours.   

Burn Bridges

Burn the bridge of the old ways, change everything that needs changing with no going back or slippage options. This drives new behaviours which can be supported and allowed to develop.

Zero Tolerance

Zero and immediate corrective action to keep people on track with the new behaviours and performance which the plan requires. Do not let people have leeway in moving to the new way of doing things. Leaders must not just lead but also carry people forward and then allow them to flourish within that new environment. 

Champions Keep Everyone On Track

Creating habit champions is a highly effective strategy. But not just line managers, identify early adopters of the new from wherever they sit within the team, ignore their title or role, and make them champions to keep everyone on-track with the new, so that they can support across all the whole company the new way of doing things.
Buddy up people through change. Encourage those who have adapted early to support those who need to be nudged along the way. But don't waste energy on the change deniers (laggards), never waste good people on carrying deadwood. They won't thank you. 

Accountability Matters

Make everyone accountable to someone else for making a permanent change happen. Keeping a change alive is one of the biggest challenges a plan has, how to keep it living post the initial launch phases. Once the excitement of plans launch and big changes has happened, keeping the plan alive so that the cultural and new habit forming changes are shaped and embedded are often where the most required to deliver the plans Return On Investment ROI.  

Embed Change

Make the change permanent across the whole organisation. Plans don't work unless you make the change permanent across the organisation and re-enforce the changes you want to see and as importantly see the change that has happened. So often looking at where you have come from to where you are now and where you see teh company getting to carries your people forward. If you have made  change which can increase your processing by 25% then show them that change from where you were to where you are now and where you will get to over the full rollout of the plan as new habits are formed.  

Create An Environment Where New Habits Can Form 

To get people to stop smoking experts identified that getting people to stop for a month increases the likelihood of them giving up smoking for good six times more effectively than other traditional stop smoking campaigns.  It takes time to form a habit, and in stopping smoking giving yourself time and changing your existing habits from breaks to who you go for a work break with (don't hang out with smokers, or carry on the smoking driving habits) if you want to stop smoking. Form new habits that support you change your habits to the ones you want. 
The same is true to making change happen at work. For people to change they need to burn the old habits that are no longer wanted, but more importantly be allowed to create their new habits which fit with the new model. That requires leaders to allow people, actively encourage them to create new habits, so do not tell them what to do, give them the environment and the freedom to do it their way. Allow people to create their own new habits.   

Measure The Change

If you measure what matters, then measure how people adapt to the new normal, the change by their habit forming as they normalise to the new work environment the plan delivers. If you measure habit forming, people's ownership of the new way of doing things, how fast they take ownership and lead the change, then you will see the plan deliver the positive outcomes which your plan wanted to achieve. 
Plans don't work, but people making change does. Focus more on delivering a plan that moves people and allows people to own their plan then you will see the productivity and effectiveness that you wanted to see the plan deliver. It's not the plan that matters, it is how people react to that plan that will deliver the results leaders need to see.

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