The most astute business owners understand the power of investing in people.
The other week, we received some very satisfying feedback from one of our customers.
We have been doing work with the Executive Team at Federation Business School at Federation University over the past few months. The work has revolved around the way the Executive works and communicates together.
Bob O’Shea, the Executive Dean of the Business School very kindly sent through a testimonial and here are some quotes from it to give you an insight into what they’ve experienced (our highlights):
- … only one month since we had the group feedback session facilitated by you I can tell you that is has had a very positive effect on the way the group works together
- … let me say that we have all been very impressed with the way you handled the whole process from the very beginning
- The personal feedback sessions you … had with each member discussing their results and their profile in depth and without raising defences was very powerful and taken on by all in a very positive way
- I have noticed (and other Team members have told me that they too have noticed) a marked change in the dynamics of our Executive meetings
- It is fascinating to observe as for example previously aggressive members are moderating their language and style in order to have a [more] positive impact
- Interestingly and importantly we are each experiencing this sort of behaviour modification outside of the meetings where individual team members are using their [personal] insights to enhance one-on-one meetings they have with their fellow team members
- …[two senior team members have] said that they now consulted each other on matters previously avoided
- …[Professor] told me that these meetings were the most productive senior level meetings he had been involved in for 20 years
- … it is early days yet but the signs are there that this is a very worthwhile investment
I have shared the above with a number of people across various industries (from education to medical, legal, real estate, insurance, retail and manufacturing). When sending out the letters and emails, I was reviewing in my own mind whether the recipients would be interested in learning more.
It became a fascinating experiment. There were, of the numerous business owners I contacted, a couple who I thought – “yep, these guys are future-focused, interested in learning and wanting to challenge things whilst bringing their teams along”. The others would give me the “usual brush-off”. Guess what happened?
Using the exact same email/letter format, those whom I expected to come back with interest did so. I don’t know whether this is confirmation bias or not. I don’t believe so.
Similar to Bob at Federation University, some business owners understand the importance investing in people. They also understand that any investment they make in this space will have a very significant positive return.
Are you one of these?
If you are, give me a yell.
“I get the figures, but I’m just not that happy” – so said the Engineer customer to me recently when we were discussing a range of issues impacting on him and his business. His three-plus decades of professional training and practice have been based around detailed analysis of numbers and formulae. Very clinical, very precise and, to his mind, now very wrong.
Sure, he can outline margin, profitability, ROI and all sorts of easily measurable results. Some years they are up, some years they are down. That’s business – and he knows that. He knows why his margin has dropped, he understands why the ROI sits where it sits and he can detail precisely his asset utilisation rates. Perfect.
He is able to rationalise all this based around the numbers, however the answer he is getting from undertaking this process isn’t the one he is looking for. It’s not that he’s asking the wrong question, he is looking in the wrong spot for the answer – because it is where he has always looked.
As we delved further into his thinking, we started getting into the “why” questions and that “what” drivers. I found it very sad that his answer to the question “when was the last time you drove into the office really looking forward to the day ahead” was “never”. How soul destroying!
The process many people adopt in reviewing their position and opportunities tend to revolve around the same approaches they have taken in the past. They tend to adopt the same metrics to analyse and assess their “success” each month, quarter, half-year or year. The results are a scoreboard which tends to drive how they “feel” about their performance.
My experience has been that having assessments which are based on metrics that don’t resonate with satisfaction or happiness tend to be low-value.
For example, as I discussed in a recent podcast I did with the guys from Grow My Accounting Practice in the US, the feeling of being “happy” or “satisfied” rarely has anything to do with hard, numerically-based metrics. Satisfaction comes from achieving things that mean something to you. Sure, I acknowledge that there are metrics that can inform this, but you’re unlikely to have the feeling of deep satisfaction purely based on a margin improvement!
When we bring up kids, we don’t measure our success or failure as parents based on their academic scores. To do so removes the focus from where (I believe) it should be. You cannot objectively measure the things that really matter in your role as a parent. I know from the various posts I see on social media that when people post things about their kids, they aren’t about their test results. They are about instances where the kid has demonstrated care, concern and love. Not getting into a heavy theoretical/philosophical discussion here, but how do you measure love? And what, exactly, is a “good kid”?
In talking through the issues with my customer, we covered a lot of ground which had to do with his thinking about and approaches to what actually mattered in his life. His concerns were around his family, his kids’ education and his staff. Hard to objectively measure.
As he indicated to me during the conversation, he finds it difficult to assess how the really important things are going in his life but can be really precise about the looking-backwards results and his forward budgeting. Once he has done his budget, they try their level best to achieve it, but, given the industry he operates in, it is difficult to drive additional revenue or improve margin by “throwing things at them”. And, at the end of the day, the results the business achieves are only relevant in so far as they enable him to do the things outside of his business that are important to him.
Focus on business yes, but realise that it is only a stepping stone/tool to fund the important things that you want to achieve. Of course we want to make sure our businesses operate well, but is that the end game? My argument is that it’s not.
After a very enjoyable meal and nice bottle of red wine, we decided that he would spend some time thinking about the things that really mattered to him and where he could increase his level of satisfaction. He is going to gain a better idea as to what he does and work out the things he loves doing. This will then inform our planning as to what he keeps doing and what he stops doing.
The analysis process he had adopted caused him to direct his focus on metrics that resulted in him losing sight of the bigger picture. As part of our discussions, we worked out that there were available and easily exploitable opportunities for him to more than double his profit each year. Because he had fallen into the rut of using the same metrics that were precise and he was comfortable with, he had not seen the opportunities that are, quite literally, sitting on his doorstep (actually, inside his office).
Beware of too much focus on analysis – the old adage “paralysis by analysis” was proved to work in our discussions as it had given my customer a tunnel vision that fed his dissatisfaction and unhappiness with his position.
When it is just about the numbers, the meaning is lost.
Speaking with one of my crew recently and he made the very sage comment with regard to a strategic issue we’re dealing with at the moment:
It’s a case of addition by subtraction
I’d never heard this phrase before and I asked him for a translation. The guts of the issue is that you can often get a lot better by removing things that clog you up or hold you back. In effect and expanding the analogy, the removal of a cancer has a positive impact on your health!
This can the in the form of processes, procedures, people, clients or whatever.
Thinking further about that phrase, I realise just how powerful it is – often times you become more welded to the process or context rather than focusing on the outcome you’re striving to achieve. It can be that you’ve always done “stuff” so you keep doing it, your loyalty to people (as staff or customers) or a supplier with whom you have dealt with for years makes you unable to see beyond your own version of reality.
You become blind to the issue and don’t take action when you really know that you should.
Reading “Leading Teams” by Ray McLean has alerted me to the fact that, as leaders, we need to listen to the feedback from our people (and our gut) when things start going wobbly. It is also imperative that action is taken sooner rather than later to deal with the issue.
We recently had an issue where we changed suppliers in our business. The effect of the change has been revolutionary – we’re getting better service, more personalised information and tailored reporting for our needs. We’ve also gained access to a truck-load more options that were available through our previous supplier that, for whatever reason, they had decided to withhold from us. This has enabled us to increase our offering and provide a greater range of solutions to our customers than were were able to before – not because they weren’t there, but because they weren’t made available to us. Outcome? Far more sales for us and our supplier, happier customers and better outcomes for all concerned.
We have subtracted, and it has lead to addition.
Similarly, over the years, we have found that where there is a change in staff, the outcome can be exceptionally positive. I recall once occasion in our business where we acted too slowly to remove a “cancer” from the business. By not acting more quickly, the damage they created was significant and took some time to repair. I must admit though, that once they had gone, the reflection with the rest of us was “we should have done that sooner”.
Due to our loyalty to them and wish for the person concerned to take the opportunities to develop and become the best version of themselves, we stayed in the situation far too long. It ended up that their best version of themselves wasn’t what we needed/wanted!
Can you see opportunities for addition by subtraction in your business? Are there areas where you’re “blind” and unable to see beyond your version of reality?
You are not alone.
You can do something about it.
Sun Tzu is familiar to most of us over 25 years of age who have been in and around business. A General in ancient China, he is credited as authoring “The Art of War”.
Reading through some information the other day, I came across a quote of his which is eminently applicable to our modern approach to business (and possibly, life):
Thus we may know that there are five essentials for victory:
1 He will win who knows when to fight and when not to fight;
2 He will win who knows how to handle both superior and inferior forces;
3 He will win whose army is animated by the same spirit throughout all its ranks;
4 He will win who, prepared himself, waits to take the enemy unprepared;
5 He will win who has military capacity and is not interfered with by the sovereign.
Reflecting on the passage, it became obvious that, in our busy lives, we can often forget that patience and culture can count for a hell of a lot when addressing the challenges we face.
Breaking down the components of the quote, the application to your business may well be seen as follows:
He will win who knows when to fight and when not to fight
A bit like picking your battles – there are some times when opportunities in business arise and you’re just not prepared to take them. Or, you decide to take them but risk the whole operation in pursuit of the new goal.
There are always three options available when opportunities or challenges present themselves:
- Take it;
- Actively retreat from it; or
- Do nothing.
Where you determine your course of action, it is essential that you marshal your resources to give yourself the greatest chance of success. If you don’t have the requisite resources (people, financial, fixed assets), then unless you can get hold of them in a hurry, the chance of a successful expansion are significantly lessened. I have often seen businesses who lurch into a new area or operation or activity that offers great potential but they go too early.
Taking the opportunity is the “easiest” course of action, however you need to consider fully the impact that this will have on your existing business and its resources. Effective planning and implementation around this needs to occur to ensure that you don’t kill the golden goose.
Actively retreating from the opportunity can be a very powerful but less intuitive approach. How do you do this? You might (for example), pass the opportunity off to a more appropriately resourced competitor who can exploit it. They can take it on, and you can gain some flow of profit share by structuring the deal effectively. This helps to ensure that you gain something from the opportunity rather than nothing. There are many possible ways of doing this – they are somewhat limited only by your imagination! It can often be a very powerful approach to maximise your returns whilst limiting your potential downside.
On numerous occasions over the years, I have suggested to customers that they don’t pursue an opportunity because they simply don’t have the capacity to take on the extra business and/or they are not positioned to undertake the development required to fully exploit the opportunity. The “do nothing” option is always alive. People often feel the need to “do something” and then rationalise it afterwards. This can lead to very adverse outcomes as they will lurch forward without proper assessment and planning.
He will win who knows how to handle both superior and inferior forces
Working out the strengths and weaknesses of your team are vital to enabling you to make better judgments and more strategically utilise the strengths you have. I have often heard the argument “but we’re too small”. They may well perceive themselves as being too small, however the strength that comes from being small is agility and responsiveness.
Playing to your strengths can be a very powerful tool – along with playing on your preferred “patch”. The David and Goliath story is a great metaphor in this regard. By understanding your strengths and your opponents weaknesses, you are better able to play a game that will result in victory. In many senses, the sheer size of a larger competitor can be a weakness as they are generally slower to react and marshal their resources to deliver a competitive response in time. Their size actually conspires against them.
Playing to your strengths rather than trying to mitigate your weaknesses is a more positive and effective approach. By trying to deal with your weaknesses, you will actually reduce the capacity of your strengths. Marcus Buckingham has put it exceedingly well in this video.
He will win whose army is animated by the same spirit throughout all its ranks
Drucker wrote: “Culture eats strategy for breakfast”.
Where your culture is one which encourages and supports the growth and development of your people, you will have a business that is going to be far more effective and resilient than your competitors who have better technology or products but a disengaged workforce.
I have written much previously on the impact of positive and negative culture and encourage you to review the posts on this topic.
The video of Marcus Buckingham as linked above touches on this subject and you can see the effect of great cultures in some of the leading organisations today – Southwest Airlines, Disneyland and so on.
It comes down, at its essence, to trust. If you provide your people with the tools and support to do their job then trust them to do it, they will perform far more effectively than where you “sit on them” and micro-manage them.
Are you adopting the most effective approach in managing your team?
He will win who, prepared himself, waits to take the enemy unprepared
Again, waiting for the opportune time rather than rushing into the fray can be a very powerful strategy.
Time is only a measure that we have invented – the real value in knowing your own team and knowing your competition is that you are better placed to exploit the opportunities that arise at a time that suits you. If you progress forward at a time that suits them, you’re not giving your business the best chance of success.
Reacting to situations is a function of this. By not feeling that you need to react to situations gives you the power to respond appropriately at a time of your own choosing. This can give you a massive strategic advantage.
He will win who has military capacity and is not interfered with by the sovereign
Depending on the style of the leader of your organisation, they might or might not be the most qualified or appropriate person to lead new program delivery/opportunity exploitation.
Often times, the leader might feel they need to be at the front of the queue to deliver the strategy or implement the program. This can be very demotivating to the team who has developed the strategy. It can be seen as the leader taking all the glory.
Best to let the person/team who has developed the opportunity to run with it rather than come in at the last minute and usurp their role. Chances are, they will be far better informed and capable than some “johnny come lately” who is seeking glory.
For a leader to swan in and try and deliver something they are not fully briefed on can be incredibly dangerous. They will often miss vital parts of the puzzle or make the wrong moves/decisions/communications that end up derailing the project.
Sun Tzu may have detailed his thinking some 2,500 years ago, but it is highly relevant and applicable today.
Organisational culture is a nebulous thing.
In many discussions over the years with customers, colleagues and others, the issue of what is a “good” culture is the hub of the conversation. Everyone wants to work in or with a business which has a great culture. Not surprising really, but what does that actually mean?
One of the most interesting conversations on this topic was with a colleague a number of years ago. He viewed our business as having a “great culture” and wanted to replicate this in his own business. Fantastic.
Even though he is a competitor, I wanted to see him have a wonderful culture in his operation as this would make him, his people, his customers – and us, better. Why? Because, as his business improved, he would provide more and better competition to us which ensures that we keep ourselves sharp, challenged and developing. This can only be a good thing. I have always found that where you develop everyone around you, you improve yourself.
In our discussions about how to undertake this, he wanted to know what we did and how we did it. That’s fine, but you need to remember that you cannot copy a culture. It is something unique to every group (business, social, sporting etc) and what works for one will not work for another.
I have just read a very interesting article on this topic by Steve Tobak in Entrepreneur. In short, I agree with his thinking, but believe that trying to copy what works in one organisation won’t work in yours. Take the lesson, not the method.
Getting back to my discussions from some time ago, we were discussing how our approach is that we try our best to “set our people free”. This means that we empower them to take their own path and develop in ways that matter to them. If this is broadly in line with the organisational vision and purpose, this has to be a good thing. Where you sit on them and ride the hell out of them, life becomes that much more difficult.
In discussing the management style in my colleague’s firm, he explained that he was a micro-manager. In effect, he was showing his crew that he didn’t trust them, that he was fearful that they might go “off reservation” and that his issue was one where he needed to feel in control at all times.
Not sure about you, but I could not work in an environment like that. Tried it decades ago when I started by accounting career and it was so stifling that I had to get out. It doesn’t instill enthusiasm (in fact it kills it), severely constrains innovation and creates an environment which people want to leave.
This past week, I have revisited a TEDx presentation by the great Ricardo Semler. He gets the idea and has been practicing the approach for decades. Yet most organisational leaders are fearful of adopting the approach which he did in his organisations. In most respects, they are the same as my colleague – unable to make the leap of faith in their people to enable the culture that they desire to have a chance of living.
We must remember that the vast majority of people in the world want to do good. They want to be involved in an organisation that exists to deliver something and provide some value to the world. Not wanting to get philosophical here, but it is part of the human condition.
By not trusting your people, by sitting on top of them and communicating (through words, actions and example) that they aren’t good enough, you’re getting the desired outcome – they will believe they’re not good enough. Then they will leave. Or, worse still, they will stay.
You need to release yourself from the thinking that holds you and your business back if you are going to truly lead. Simon Sinek, in his inimitable style, puts it beautifully.
Near the end of our discussion, my mate asked me when I knew the culture in my organisation was good. I told him that I didn’t. But I did know when things weren’t right as the “feel” of the place changed and became less “flow-like”.
If you want to create a superb culture in your organisation, you need to get out of your own way. That’s not nebulous.
And so it all begins again.
The past year has been an “interesting” one on a number of fronts and we have seen some of our customers make significant progress in a range of areas. Their progress has been due to some detailed planning, decision-making and accountability across their organisations and it is exceedingly pleasing to see the results that reward the consistent effort they and their teams have put in.
The major notables can be summarised as follows (and this is not an exhaustive list):
- clarity around the “why” of the business;
- effective communication with and engagement of their teams;
- focus being driven in the areas of their business that offer the greatest opportunities (niche);
- planning, implementation of the plan and review of results against expectations; and
- being prepared to try new things and approaches.
Funny isn’t it – the things that have delivered terrific outcomes for business are the things that everyone knows that they need to do? So, why don’t they do it? I call it being uncomfortably comfortable – you’re OK, you know things can be better, but you’re pretty comfortable and don’t want to stop being comfortable.
This issue is one we constantly battle with in discussions with customers who we know can be better – they are so busy being operational, they forget/avoid to be strategic. And they are comfortable.
In many respects, they have traded off their vision and focus on purpose to being servants of something that doesn’t really matter to them – because it’s easier. It is also far less fulfilling.
In one of my discussions with a customer prior to Christmas, he came in, sat down and said “I’m just really happy”. This same customer has undertaken some massive changes in his business – all as a result of effective questions, looking at the broader economic environment and considering what he really, deeply values and where his skills lie. He has brought his team along with him. He and his business are now far better, more agile and responsive than they have ever been. And they are ideally placed to take advantage of the changes that are going on in their industry.
In the current environment where there is so much disruption going on – across nearly every industry, the need to adopt a more strategic approach is essential. The commitment to do this can be hard and challenging, but it is necessary to enable the business to thrive and continue to deliver on what it is there to do. Avoidance of the work required will see you wonder why you can’t seem to keep getting the results and outcomes that you desire.
On Saturday morning, I was invited to do an interview with some guys in the USA about what advisory work should look like – it will be up on a podcast in a couple of weeks. The guts of the discussion really turned on the fact that, as a business owner, you need to ask better questions. The types of questions that really dig into the opportunities and challenges that confront your organisation. By thinking about and answering these “better” questions, you then create a planning template which can be implemented in your operation to make sure the changes that are required actually get done.
The New Year promises to be a challenging and exciting time for all of us. There is a lot of stuff going on the world at the moment which, whilst remote from Australia, will have an impact on us. Things like the slow-down in the Chinese economy, the migration issues within Europe and the coming Presidential election in the USA. Each of these things can have an impact on your organisation (believe me, they do) and you need to consider how you’re placed to take advantage of the opportunities that do present themselves.
By way of example, think about the issues going on in China at the moment. The well-reported slow-down of their economy is unlikely to directly impact on you unless you are exporting into that market. However, the impact of that slowing economy will be felt in Australia through lower export demand, greater uncertainty and a loss of the confidence that “China is there” that has supported the growth of our economy over the past decade or so. We have seen the impact of the downturn in the mining industry over here. What was once “boom time” is now not so. The flow-on effect of this has had a marked impact on a number of regions around Australia. It is impacting on home prices (did you know that the banks have a number of postcodes where they won’t undertake any mortgage lending?), employment levels and subsequent demand for goods, products and services. This challenge then flows out beyond those regions into the organisations that support the businesses that were operating at “full tilt” in those regions.
Consider the impact on the airline industry – fewer jobs and increased closures of mines means fewer fly-in-fly-out employees. The airlines have specifically geared up to deliver the services required to meet the FIFO demand from the mines – now, much of that equipment is sitting idle and/or being used far less. This means that the airlines therefore have less cashflow to support their commitments for the planes, staff and support crews. They can either try and get rid of the excess capacity, or pass the increased costs through to the other customers through less discounting/higher pricing. Have you noticed how there are fewer discounts being offered of late? I’m not blaming everything here on the Chinese economy, but I am trying to demonstrate how a global event that seems far-removed from your operations, can actually have a trickle-down impact on your business.
Over 2015, those organisations that have thought further and harder, who have asked themselves the challenging questions and have gained greater clarity about not only their operations but the industry they work in and the broader economic environment have flourished. Because they have done the work.
How are you placed for 2016? Are you prepared to ask yourself the right questions (or, better still, do you know what questions to ask?) to create the outcomes you desire? If you’re not, then you might well be bound to repeat the success or otherwise of the past year.
One of my favourite quotes come from Albert Einstein:
To make the coming year as effective as possible in delivering things that really matter to you, please don’t go insane! The change in approach is challenging and requires work, but it actually isn’t that hard. You just need to make up your mind to do it.
“You’ve got a gift” – so said one of my guys after a fantastic meeting with one of our customers.
Don’t know whether I agree with him. Whatever gifts I may have, I probably don’t use as much as I should. However, I digress.
The real essence of this post is that we, as professionals, need to be aware of the issues that are confronting our customers and, if we are unclear, ask better questions to enable us to get to the guts of the issue. This is a skill that I am still learning – although I understand that I will never perfect it.
The discussion with our customer was meant to be about getting some clarity about their goals for their business. We had the meeting booked in for a while and had let them know that this was the purpose of the discussion. They arrived late (normally not a great sign – putting it off), which flagged a possible issue with the process about to be undertaken.
The discussion opened up with them identifying some frustrations they were experiencing with one of their team members. It then progressed on to analysis of the communication styles adopted by both people and, how not fully appreciating the communication style of the recipient and tailoring the message for their needs might have been the actual cause of the frustration in the first place.
This then led to a discussion about the style of the owner of the business. They started to open up as our discussion developed around why they were aware of the style they had and the impact it could have on their team, they made the statement “I know this, but I’m not doing it”. That then caused the question to be asked “why not”?
And that’s when the really positive stuff started. Suffice to say, the tissue box got a bit of a hammering as they opened up about external issues (non work-related) that were impacting on them and had been impacting on them for some time. It was fantastic as we could now understand why the business, which has incredible potential, has been stagnating and not exploiting the numerous opportunities that have presented themselves.
The owner of the business has simply not been in the emotional state they needed to be in to enable them to drive and direct the business. Powerful. Meaningful. Honest.
So, we did what all accountants do, and walked through the journey they have been on (isn’t that what all accountants do?) to enable them to fully verbalise the feelings they had been having and to enable them to understand that they had massive opportunity in the team – if only they could trust themselves to “let go” a bit. About half way through this discussion, they indicated that they would go home and cry all afternoon. That’s not necessarily a bad thing.
However, as we continued to talk through the issues and acknowledge the impact they had on the owner and the business, the air seemed to clear a bit. By getting the issues out in a non-judgmental and non-confrontational environment, we were able to help them see that the “fork in the road” wasn’t actually anything to be feared and that the way they were feeling was OK.
The discussion eventually returned to the communication with the team (that’s where it all started remember) and how it can be improved. They will be undertaking some Trimetrix Reporting with the team to allow everyone to better understand and appreciate the differences in the team communication styles and create an environment for better communication within the group.
Our customer could then see that there was a path forward and, whilst acknowledging the impact of the issues outside of work, started to get refocused back on their business. We made commitments as far as setting some goals (some wonderful additional opportunities came out in this discussion) – the big battle will be getting the goals prioritised over the coming month or so – there are so many opportunities for this business we have to narrow them down and align them to the goals that will be fleshed out.
At the end of the meeting, we recommended that they go home to enable them to have the big cry they had earlier said they needed. “No – don’t need that now. I’m feeling a lot better”.
A really positive outcome was achieved by creating the environment and asking better questions (usually the ones starting with “why”) to get to the core of an issue. Unless you carve up the elephant in the room, it crowds everything else out.
Don’t think I have a gift, but I’ve got a dead elephant in meeting room one and I need more tissues.
It’s funny – most businesses feel like they are operating in an environment where chaos reigns.
The sad thing is, most businesses do not understand that, until you get to about 20 employees, chaos is actually a natural state of being.
The good news about this fact is that when you’re aware of it, you can plan for it.
James Fischer wrote “Navigating the Growth Curve” (Growth Curve Press, 2006) following his research of (then) 600 businesses that had grown and developed. He found that there were some very common issues that those businesses faced and that, armed with this knowledge, other businesses could predict and plan for the issues that would accompany their growth.
As a consequence of his research and writing, Fischer and Laurie Taylor from FlashPoint! developed the Growth Curve program and this has been picked up and tailored for ease of use by Targeted Training International in the US.
We first came across the concept some three years ago and have now adopted the program as part of our offering to our clients. We’ve rolled the program out to a number of our customers in the past 18 months and the results have been sensational.
So, the chaos bit? Well, the table below shows the findings of the five top challenges for businesses at the various stages of growth. Some businesses will face some different challenges, however, based on the research, the following are the most common issues businesses face as they grow:
|Stage 2||Stage 3||Stage 4||
|1-10 staff||11-19 staff||20-34 staff||35-57 staff||
|Cashflow challenges||Improved profit design||Employee turnover||Improved profit design|
|Limited capital||Improving staff buy-in||Project management and resource co-ordination||
Chaotic periods destabilising things
|Hiring quality staff||Unclear values||Vision for future growth (Where? How?)||
Lost knowledge when employees leave
Slow getting new products/services to market
|Communication gap (leaders – staff)||Culture resistant to change||Difficulty diagnosing the real issues impacting growth||
Difficulty forecasting problems in advance
|Expanding sales||Communication gap (leaders – staff)||Slow in getting systems and procedures implemented||
Copyright – 2013 FlashPoint!, Origin Institute & James Fischer
When you review where your business is against the issues you’re currently trying to manage, do you find any of the issues raised above resonate? I have yet to find a business that doesn’t identify very closely!
The best bit about this is though that, with the identification of the issue, there are processes and approaches specifically designed that enable you and your team to address the issue for once and for all. It “cures” the problem and allows the operation to grow in a less chaotic and more planned and deliberate way.
The approach we use not only looks at the above (as part of the “27 Challenges”) but also addresses the style of the leader, the Non-Negotiable Rules for each stage the business passes through, the right balance of confidence and caution in the business (that bit gets REALLY interesting) and the mode of operation of the teams within the business. In short, it brings out the “elephants in the room” and cuts them to bits so that we remove the “hidden agents” that are holding the business back.
Business is complex – the more people you have on board, the more complex it gets. By undertaking the processes such as those outlined above, we can de-clutter the business and get it on the path you originally desired when you set it up or took it over.
It’s fun, challenging and enlightening. It’s also incredibly valuable.
OK, we have a week to go until the end of this financial year. How has this one gone for you? Has it delivered what you envisaged or not? What have you done well and what have you stuffed up?
Have you been satisfied with your progress this year or have there been things crop up that derailed you/your business on the way through?
Each July, it is worthwhile going through a process of re-aligning you and your business to ensure that you start the new year in the best mindset possible. This can be a challenging exercise – especially if you’re brutally honest with yourself. It does present a great opportunity for you to invest some time and clear thinking in determining the direction and focus of your business.
Many businesses often fall into the “same same” trap – they keep doping what they’ve done in the hope that things get better. As I say to our guys in here and to our customers – Hope is not a strategy.
Taking the time and making the effort will pay-off. The plan to do this, make some decisions and get things going in the direction they need to go will help “de-shackle” the business and ensure that you are making the most of the opportunities that have presented themselves.
Given the fact that hardly any businesses have any sort of plan and, when they do, it’s stuffed in the bottom drawer until your bank wants to see it, undertaking a proper planning approach and then implementing it can give you a very powerful competitive advantage over your rivals.
We have found that our customers who develop and implement a proper plan for their business – one that reflects the vision and goals of the owners, create superb results. They are more profitable, more effective and create far better working environments than the businesses that don’t. The secret to this is getting your team involved in the process.
By getting your team on board in the planning and implementation, you enable them to develop a real context about the “why” of the business. They get to understand the dreams of the owners and, on all occasions where we have seen this, they own it for themselves. In many respects, they take on the business direction personally. This creates an incredibly powerful culture within the organisation.
So, please think very seriously about investing the time to develop a plan and then invest the time to implement it. Hint: make your KPI’s reflect the implementation. If you want more information about this, please let me know.
We use the Growth Curve approach (research based) with our customers. It’s proven, effective and exceedingly powerful. The changes it has made to the businesses who have gone through the process are profound.
Special offer – sign up for one prior to 30 June this year (to be rolled out through next financial year) and we will attend to the implementation for you at a reduced price. Contact us to discuss.
Planning is an essential element for any successful business. Implementation is the key component of any plan that sets the really great businesses from their competition.
Invest the time in your business this July – you will be glad you did!
Every so often in a meeting, you find out information that makes you shake your head in wonder. I had one such meeting this morning.
Our customers have been requested to provide a price for some work to a large Australian, publicly listed company. Great.
The issue is that the price they put in was some 55% over the price the company had received from another business.
OK, but, when you receive two prices that are aboutthe same from different providers and another price that is significantly lower than them (over $500,000 less), you would more than likely pause to consider whether the significantly lower price was, well, realistic. Or whether the price was submitted to get the job in the hope that other work will crop up once the contractor is entrenched on site..
The trouble is, the managers of this publicly listed company are incentivised to under-spend their capital budgets each year – the more money they save against their budget, the bigger bonus they get.
As our customer said this morning – “they will end up with a pile of crap that won’t do the job but the manager doesn’t care as he got his bonus”.
The incentive program any business uses needs to align itself to the needs of the business and the staff but also, fundamentally, to the long term goals and strategies of the business. Where there is no alignment, you run in to significant problems on a number of fronts.
Firstly, you want the incentive to encourage the type of behaviour you want to see. If short term profit is the focus on the business, build your incentives around that. However, the focus on short term profit is, to my way of thinking, myopic. Getting a longer term strategy is far better for everyone concerned. There are some notable people who like longer term strategies. People like Warren Buffett.
Secondly, the incentive needs to match the motivators of the person being incentivised. Using cash bonuses is fantastic however, the bonus can take other forms which might not cost as much but which may be far more highly valued than cash. By aligning the bonus to what actually matters to your people you are also showing that you care for them as people rather than using a blunt force (cash) for everyone. For example, a cash bonus is terrific but if you were to pay for a family holiday for your staff member, or give them some extra time off as a bonus (especially when they have a young family), this can have far higher value to them than anything else.
Finally, think about how you might face your shareholders/financiers where you had to explain how your business was so focused on short term thinking and behaviour that the investment decision made in plant and equipment spend was solely based on price and not quality or longevity.
They might, on hearing this information (however it is packaged) cause to question your thinking and ability to act as a custodian for their interests. I seem to recall a similar approach was adopted by some banking institutions during the 2000’s. That really didn’t end well.
The current business environment is very challenging for a lot of businesses. There is a lot of competitive pressure due to a lack of consistent activity – especially in commercial construction. This causes many businesses to try and “buy” work – price it with little or no (or, occasionally, negative) margin. All they succeed in doing is making their exit from the market more rapid and they tend to deliver incomplete jobs as they go broke before the job is finished.
If your incentive program gives your team tacit or explicit approval to seek lower and lower prices – at any price, the quality of what you purchase will decline and will end up costing you more.
A friend put it beautifully many years ago “I am not rich enough to buy second best”. When you are designing and implementing your incentive program, make sure it delivers what you really want – not a facsimile of what you think you might like.