Adopt, adapt and improve: What I learned from Lord Alan Sugar


The star of TV’s The Apprentice opened the second day of the National Achievers Congress to an audience of 7500 at London’s Excel conference centre. Along with Richard Branson who would speak the following day, Sugar was interviewed by Michael Buerk. It was the first time the two had met and would probably be the last if Sugar’s response to Buerk’s questions was anything to go by.

Sugar felt a bit affronted by what he considered to be simplistic, inane or irrelevant questions. He correctly surmised that we wanted to know his business thinking, how and why he did what he did. We were less interested his so-called ‘rags to riches’ backstory (which turns out not to be quite true anyway). When asked what one piece of advice Lord Sugar to give to the audience he refused to answer, saying how could he cater for all the different kinds of people in the audience with one stock answer. This gave us an insight into the real Alan Sugar. And guess what, despite what he says, it’s very much the same as the belligerent boss we see on the telly.

The questions I would have loved to know the answer to were things like why did he sell of his manufacturing business when he places such importance on making things? Especially when his definition of a proper business is “you have an idea, you make it and you sell it.” He attacked those who made their money on the stock markets, “making money from other people’s misfortune” and yet there he is now, effectively a property mogul. Not too dissimilar.

He also critised big internet business such as Facebook, citing it as a waste of time. He couldn’t see “where the money is” in such businesses and made reference to ITV losing money of Friends Reunited and the dot.com crash of 2000. Both of those examples are as irrelevant as saying there’s no money in computers because Apricot* went bust. Sugar fails to understand what has become known as ‘the New Economy’. The ‘money’ in Facebook is not extracted from traditional methods but from the value in the network and the targeted way people can be reached. Money these days is not made by shouting but by going where the eyeballs go.

Sugar’s main belief still does stand true and offers us all a sober lesson. He believes that a business should start from the ground up, work hard and make money and profit. He pointed out that many young people have been given the erroneous impression that it is all too easy and that it is their ‘right’ to be able to do it and to get loans from banks without taking on board the risk. Sugar had got into trouble at a college, where he was asked to give a talk, for responding in his down to earth way. He critisised a student who thought it was outrageous that the bank wouldn’t lend him hundreds of thousands of pounds without putting his house on the line. “You have to show the bank you are willing to take a risk. If you don’t, why should they” Sugar said.

He gave a great example of this when he wanted to borrow some money for his fledgling computer business in the early 1980s. The bank asked him what assets he had. He listed the components and half-built computers he had in stock. The bank valued all that at zero. They told him that if he went bust, what would they do with a load of components and screws? This is a good lesson for us to hear as we often think in business that we have value in assets which in fact are liabilities (there may be assets we do have, that we don’t value as much as we should, such as intellectual property).

What Sugar was good at, was seeing an opportunity to sell someone something they wanted. His early examples were when he was employed to sell tape recorders. Instead of hauling round every small independent shop that might buy two units, he went to the then new bigger chains such as Currys, Rumbellows, Comet and Dixons and got them to buy hundreds or even thousands.

All his type of innovative ideas take the same kind of route: he modifies something that already exists to make it more attractive. Think about his most famous business, for which he is still known for today, home computers. The market was dominated by the Sinclair ZX Spectrum, Commodore 64 and Acorn BBC. Sugar had previously been making bundled hi-fi equipment. Up to that point, all hi-fi equipment was sold as separate units made by different specialist manufacturers. You bought a record player, a tape player, a radio and an amplifier and you ‘stacked’ them on top of each other and plugged speakers in. His model was to use cheap Japanese electronics and put the record player, tape cassette player and radio all in the same box. At the time this was a revelation and it opened the way for the stereos and ‘ghetto blasters’ that defined the 1980s. Lifting the lid of a rival’s computer he saw that inside there was no magic, it was just silicone chips, resistors and circuit boards, just as in his hi-fis. He applied the same idea he had done to his hi-fi business. Let’s have a closer look.

Sugar four things that made his business a success, these four simple innovations:

  1. He built in the datasette (the cassette tape recorder that the computer programs were stored on) into the keyboard.
  1. He bundled a cheap monitor so that the kids wouldn’t have to plug their computer into the family television.
  1. He used MSX BASIC as the operating software. This was a new variant of Microsoft’s BASIC programming language that was already being used on most of the computers of the time. The difference was that each of the different companies used a different version of BASIC so a program written on one make wouldn’t run on another. MSX was a new standard that was being adopted by a host of other computers meaning that software for the new Amstrad computer had more games being written faster.
  1. He made it really cheap, and sold it really cheap.

Many would argue that the Amstrad home computers (as well as his stereos) were cheap, cheerful and lacked style and class. They didn’t attract the wider appeal, kudos and cult following of the classic home computers like the ZX81, Spectrum, VIC20, Commodore 64 and BBC B. But they did make Sugar a lot of money.

When the home computer market ran out of steam (the home computer gold rush only lasted from 1980 to 1984) he switched his attention to a computer that would only have one function: a word processor. This is perhaps Sugar’s finest hour. He got into that gap in the market at exactly the right time. With subsequent innovations such as his hand-held personal organiser and video phone, he was too early. In fact it seems, with the possible exception of his BSkyB equipment and petrol station advertising screens, that consumer product magical innovation skill has eluded him since the mid 1980s.

But perhaps that too is a lesson for all of us. Our businesses may be lucky enough to make money from something that becomes iconic, or maybe we’ll have to be happy with making money from something that goes unseen and unsung by the general public but is successful nonetheless. We need to make sure we are working hard to make profit, not glory as the two seldom go together.

One thing is clear from what Lord Sugar had to say. If you want to start a business and be successful in it you must chose something that you have some knowledge in. It must be something that you have experience in, and it must be something you have a passion for. So many people, he pointed out, have made the mistake of trying to jump on what they think is a get rich quick bandwagon of what appears to be a good idea but is outside those key areas of their knowledge, experience and passion. The secret to a successful business is simple, obviously simple, but it’s not easy: hard work, determination, innovation and an eye always open for opportunities.

Just look at what happened in the latest series of the BBC’s The Apprentice. Sugar changed the rules. He wasn’t looking for another employee this time. He didn’t need another salesman. That’s why Tom the inventor won. He was really the only suitable candidate. The rest were old school sales employees. Sugar valued the approach and ideas that Tom had and saw the value in his already substantial achievements with his curved nail file invention. Who knows what he’d come up with next.

This shows that Sugar still has some interesting business mileage in him, unlike Donald Trump who’s tv series has descended into celebrity game show farce.

Lord Sugar may not be held in the same high esteem as Richard Branson or James Dyson and his companies may not be regarded as cool as Innocent or Apple. he may be out of touch with some of the newer methods of doing business such as the increased emphasis on networking (although he does tweet every day) but his knowledge of the principles of starting, innovating and selling to make a profit are universal and give us sobering lessons we can all apply.

*Apricot was a British PC manufacturer in the 1980s who could have rivaled IBM and Apple, but didn’t.

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Embracing your uncertainty


I’ve been watching all the old episodes of TV’s ‘The Apprentice’ – both the US and the UK versions. Watching each episode back-to-back is a different experience than watching it once a week. Apart from driving me mad, the overall impression is about how consistently good the majority of candidates are at certain tasks and how consistently appallingly poor they are at others.

Here’s what they are good at: hard sales, taking action and confidence

Here’s what they are bad at: generating new ideas, presenting, expressing ideas, getting along with and motivating people and seeing the big picture.

It’s interesting that what they’re good at falls into competencies traditionally categorised as ‘left-brain’ controlled tasks and what they are bad at are all right-brain dominated tasks.

Both Donald Trump and Sir Alan Sugar repeatedly make it clear that they’re not looking for another sales person. They’re looking for creativity and leadership. Yet so few people with these skills apply to be on the show (or get chosen to appear on the show).

The reason is perhaps simple, but interestingly not often discussed. Left-brain thinking has a unique characteristic that is not often included in those lists of ‘left’ and ‘right’ brain specialities. Left-brain thinking has confidence and certainty, often even when such confidence is unsupported by evidence. To even apply to be on the TV show you would need to have an unusual level of self-confidence. To actually survive the process and complete the tasks you would need to be able to develop a level of certainty that could drive you through it all. These are strong left-brain attributes.

Right-brain thinking on the other hand, is doubtful and uncertain of it’s own abilities. This is why left-brain thinking always dominates. This is the necessary downside of right-brain possibility thinking, to be able to see the world i flux and as a field of probabilities and uncertainties. It’s this kind of thinking that generates ideas in the first place. It’s this thinking that controls the creative process. It comes at a price, that of self doubt.

This is why so many artists, writers, musicians and performers all at some stage of their careers have periods of massive self-doubt and uncertainty about their abilities. It’s interesting that these are exactly the sort of people that Trump and Sugar need (in fact that ALL businesses need) but these are the sort of people who would never apply to take part is such a process.

What sort of processes do you have to attract and keep these type of people, the creative types who will transform your business?

What sort of processes do you have to nurture your own confidence in your creativity?

Once we become aware that this is how the brain works we can use it to short circuit the duality and use the left-brain certainty and confidence to back up our emotional and artistic sensibilities of our right-brains to empower us instead of undermine ourselves.

Embrace your uncertainty and realise it means you’re onto something. Look at your past successes to help realise you can be more creative, you can use your talents and you can push forward with bigger and better ideas and a more productive life.

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Want to See Some Magic


Did you see ‘The Apprentice’ where twelve hopefuls audition to work for Alan Sugar and a six figure salary? What a highly entertaining and illuminating television programme. I’ve been watching with a mixture of ‘how could they get that so wrong’ to ‘I’m so glad I’m not there’. The fifth episode brought to a head a subtext that has been bubbling under for the previous four weeks. All of the tasks have demanded a whole manner of skills such as leadership, perseverance, management and negotiation. But in all of the tasks from selling fruit and veg, designing a calendar for Great Ormand Street hospital, getting good deals, running a themed restaurant to producing an advertising campaign, both teams, especially the losing ones, have been let down by a serious lack of creativity.

It was never so obvious than in the fifth episode when Paul’s team had booked actors and studio time to film an advert for which they had no idea what it was. They actually spent five hours in the ‘Blue Sky Room’ at Satchi and Satchi only to come up with nothing.

Interesting then that after they knocked off for the night and went back to the house, Paul was visited by inspiration. It took a change of scenery and a more restful moment of silence and solitude for the idea to come.

A shame it wasn’t such a great idea. It was a start, but they didn’t have the time or inclination to think of anything else.

How come these so called ‘top entrepreneurs’ are so lacking in the ability to think of ideas? Creativity seems like an illusive mist to most people who think that having a ‘divergent phase’ with flip charts is what is needed. One of the reasons is that creativity is not a gift, it is a skill. Like any skill it has methods that need to be mastered. Like any skill the methods need to be practised. Just knowing the lines of a play aren’t enough. It’s the rehearsal that makes it work.

You can learn how to negotiate, how to project manage and how to sell. There are courses on all of those. You can practice those in your field of work. But as the Apprentice shows, don’t leave out creativity from the mix. Learn the techniques and use them to get the ideas to get ahead.

Think new thoughts. Find better ways of doing things. Find better things to do. That’s what people overlook. That’s what creativity is and that’s what Alan Sugar did to get where he is today.

And that’s magic.

For more see:
www.aydinstone.com
www.sunmakers.co.uk