Angela Bradbury from Chime Advisors, one of this year’s Entrepreneur Academe cohort, tells us Why Cash Isn’t Really King

“Cash is king.” This phrase seems to be one of those things people say without really thinking about what it means or whether they truly believe it.  I’m told as an entrepreneur that you need cash to cover your bills and payroll before you’re able to realise revenue. Investors are told to keep a certain proportion of funds in cash for easy access in case of crisis. Both of those concepts clearly have merit. But why do we say cash is king? It sounds more like cash is a resource to be deployed by the king when necessary. “Cash is an army”, perhaps.

So cash is essential, but it’s not enough. The really important thing is to know how to prioritise it, and what to do with it. In other words, knowledge is king.

When I started my career in management consulting McKinsey, we were taught to approach hiring, performance reviews, client assessments and recommendations in the following way. Attempts to appear otherwise notwithstanding, no single individual or organisation can be exceptional at all things. It’s important to nurture those strengths you do have, and it’s also important to be aware of your weaknesses. These should be minimised, but only to the extent of clearing the bar to be satisfactory — beyond that, it’s diminishing returns on investment of your time and energy. This is the ‘hygiene and spikes’ model: make sure you have hygiene in all things, and one or two spikes to build on and exploit.

It seems to me that cash is one of those things that is a weakness for many people, and everyone should seek to reach a hygiene level. All kings need an army. But the size of that army isn’t going to win the battle unless you have a spike.

Something I vividly remember from school is learning about the battle of Cannae – and bear with me here. Hannibal, a relatively unknown leader of an underdog Spanish army, had marched over the Alps (with elephants, of all things) and had threatened Rome’s territories in northern Italy. The Romans regarded him as little more than a madman and a nuisance to be crushed, and sent their biggest army to do so.

The Romans had a tried-and-tested battle plan involving marching in formation, a plan that had worked impressively and almost unfailingly for them in the past. This was their spike, and Hannibal knew it — his much smaller army would have been wiped out if they’d gone head to head. But while the Romans had been happily exploiting their spike, they’d forgotten to maintain a hygiene level of agility. Put simply: the Romans were a one trick pony, and Hannibal knew their trick.

Hannibal lined up his puny army to meet the Romans, who were practically jeering at the imbalance of numbers. They confidently marched forwards, and seeing Hannibal’s front lines fall back as they approached only encouraged them.  But they didn’t notice Hannibal’s cavalry going round the sides, encircling them and taking the Romans’ own cavalry by surprise. Eventually, the Romans found themselves with only foot soldiers left, and completely surrounded. They didn’t know what to do, and the soldiers in the middle of the army were powerless as Hannibal’s fighters started at the outside and gradually worked their way in, massacring every last Roman.

That story has always stuck with me. Possibly to do with the fact that we acted it out using jelly babies and ate all the Romans! A metaphor for the Romans’ defeat perhaps… We now see a (less bloody) version of this time and time again in today’s battles of disruption.  The huge, cash-rich incumbents seem to be effortlessly encircled and decimated by young, nimble tech startups. Kodak, Blockbuster, Blackberry — all have relied on their tried-and-tested spikes too long, neglecting to maintain hygiene in intelligence and adaptability, and in the end were powerless, surrounded by their less cash-rich but smarter, more agile competitors.

Hannibal won by knowing what the Romans were going to do, and being smart enough to compete on different terms. The Romans lost by not recognising their own limitations and Hannibal’s spike in intelligence.

I’d like to think that if the Roman generals had been clients of Chime — my company which connects businesses with experts — we might have been able to change history. We’d have put them in touch with another Roman general in a far corner of the empire who had also found the standard formation tactics failed for whatever reason. We’d have put them in touch with a general who had been defeated by Hannibal a few months beforehand (if they were still alive) to understand what tactics he’d used. We might have found a deserter or prisoner from Hannibal’s army who could talk about their background and training. And if investing in armies had been a thing, I’d like to think that we’d have helped any investors who were our clients at the time to predict what was going to happen, choose to back the underdog and share in his success.

So, do you still think cash is king? I say knowledge is king. To find it, ask us about your Hannibal.

Angela Bradbury is the Founder of Chime Advisors, an expert network typically serving management consultants and investors doing research for strategy, due diligence or origination. Their cutting-edge proprietary technology automates and optimises the sourcing and matching of experts for requests on demand, with turnaround time and quality control second to none. Submit a request for phone interviews or an expert survey at chimeadvisors.com.

Meet Angela and the rest of this year’s Entrepreneur Academe cohort here.

Interested in mentoring entrepreneurs like Angela? Then tell us a little about yourself here.

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