By John Rosling, UK CEO of Shirlaws
The Intellectual property (IP) in your business differs from your product; it is the set of fundamental skills, knowledge, expertise, experience, relationships and physical resources that supports your position in the market and allows your product to exist. It is the fundamental rocket-juice of your business and it is what makes your business unique. For a lot of businesses it can be an elusive concept — but well worth getting to thoroughly understand.
To pin this difficult idea down, an example of its power in action may help. I was recently asked by a large accountancy practice to advise a client of theirs who had come to them for help in selling the business. The company concerned was in the asbestos removal business; the business owners felt trapped in their business and wanted an exit; the market was in decline, margins were under strong pressure as competitors brought in foreign sub contractors and had additionally been strongly impacted by the recession. This was a classic single product business which was additionally very reliant on the business owner. The valuation the accountants were able to place on the business was consequently not attractive which trapped the owners in the business. The accountants felt we might be able to help.
When we met, I asked the business owners to describe their IP – what was uniquely valuable in the business. The initial answer was that the IP was “asbestos removal” but this, of course was his product. After considerable discussion the owners of the business began to articulate the genuine IP and came up with an impressive list that included: the removal and transportation of hazardous waste, the profound understanding of complex legislation and compliance with European and UK regulation, Health and Safety Training, the recruitment of deployment of specialist trades people, strong relationships with local government and agencies, project management in a complex regulated field….. The next step was to ask the business owners that, if they came across a business with those attributes but with no idea of the product the business sold, what product would they imagine such a business could deliver. The answer (which ranged from specialist consultancy, through Health and Safety and other specialist training, recruitment and specialist transportation) gave the business a huge choice of new product ideas based on their own IP and therefore highly likely to succeed.
In understanding your own IP you need to get very clear about what makes your business really unique amongst your competitors whether it’s your systems and processes, knowledge, intellectual resources, people or relationships; or a unique combination of these. This knowledge will help power your innovation strategy and drive profitable growth and burgeoning equity valuation, which we covered in other articles this month.
And what became of the Asbestos business? It was clear simply repackaging the offer would not solve the fundamental problem. But understanding the IP allowed the business to create a whole new, and highly profitable, product suite in the collection, transport and disposal of low hazard waste leveraging the existing relationships the business had and the unique proposition contained in the IP. The business goes from strength to strength and the owners are revitalised having re-examined position and functionality strategies and planning an exit in about five years. Their loyalty to their accountants who had the foresight to bring in alternative advice is exceptionally strong.
Shirlaws helps business owners transform their businesses. From unblocking barriers to growth to ensuring the business pays richly in time and money, our systematic programme has transformed the lives of thousands of owner-managers all over the world. Founded in 1999 Shirlaws has now grown to include operations in North America, UK, Europe, Middle East, Australia and New Zealand. Shirlaws has redefined business coaching with our unique approach based on establishing a balance between commercial outputs (e.g. increased revenues, profits, efficiencies) and cultural improvement (e.g. better leadership, communications skills, life balance). Our coaches take the many complex issues involved in running a business and help make them simple and easier to manage. We work alongside clients to guide their businesses to achieve long-term, profitable and sustainable business growth. What Shirlaws brings is a language and system for growing businesses and building internal capability. A language and system that gives our clients three simple things: more time, more money, and less stress.
John Rosling will be speaking at Fresh Business Thinking LIVE!. His session will explore: how successful businesses understand the unique “intellectual property” that is the rocket fuel of their business; how they use that knowledge to drive extraordinary future revenues; why innovating the way you package what you sell is the fastest way to secure new markets at this stage in the cycle; how product evolution and looking “beyond service” will create clients for life; and how the businesses that fail will be the ones that simply carry on selling the same product in the same way at the same price.
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