In his book Good to Great, Jim Collins wrote about the power of humility, personal will and its links to leadership excellence. Not to be confused with being a big softy, my own experience is that effective leaders running successful companies exhibit loads of it! Humility is the inherent quality of treating everyone as an equal, with respect, candour and dignity. Unfortunately for many, success very often breeds ego’s the size of cannon balls – self-interest overshadows the importance of colleagues, friends, customers and very often family. Acquiring a big ego can lead to a danger zone for leaders – a disconnection from the things and people who lie at the heart of success, they become redundant and forgotten. The ego is a critical ingredient to making enemies and switching off the support from those who matter.
Ego’s are an unsavoury element to corporate life as well, pure observation leads me to believe that all too often judgements are made purely in self-interest. Well my advice is, make balanced business decisions ones which consider the impact on staff, shareholders and customers (and family!). Very often the mighty fall as a result of their ego’s drowning out any appreciation of humility. Self awareness is the antidote and as my Mum say’s – never get too big for your boots!
It’s really sad to see how many businesses fail to realise their full potential. Is it down to poorly defined value propositions, bad design, poor sales and marketing or financial control…sometimes it is. My view is that a company’s growth prospects are inextricably linked to the rate at which the founder, team and leaders can develop themselves. Businesses make transitions at key points of their journey and if the management fail to personally address these changes and the extra demands placed on them then the “growth ceiling” very quickly presents itself.
It starts with the leader’s ability to undergo personal change and continuously adapt their style and approach to overcome the challenges faced along the journey – self awareness is a must have for all entrepreneurs. In a high growth business the founder has to be clear on what they are good and bad at and build a team around them that compensates for their own personal shortcomings. The inability to delegate is the classic dilemma faced by so many individuals running their own business. This is the very reason why so few companies go on to employ more than 25 employees. Organisational development is a pivotal part of achieving growth, and what do the VCs keep telling us – it’s all about the team.
My advice to any high growth business/entrepreneur is get the right people in the right seats doing the right things. Having the wrong people doing the right job is so common, and if we are honest with ourselves virtually all of us have been there and got it wrong, big time! A company without an effective team delivers sluggish performance at best – gazelle performance? Not a chance.
Embracing a learning culture and environment where personal improvement is encouraged and supported is non negotiable, but of course this takes time. Staff and the team are the most important component of any business. When we get the right team in place almost anything is possible. Without it growth is stunted and blockages appear – these blockages manifest in long working hours, customers being let down, poorly managed contracts, finances going off the rails, quality dipping, disgruntled staff, poor communications – a feeling of rabbit in the headlights, can’t see the wood for the tress, all familiar clichés entrepreneurs have come to live with. The antidote is investing in people and staff.
Getting the organisational structure and team right is a difficult job and perfection is challenging to say the least. Your organisation is only as good as the people who are part of it and remember the organisational and team effectiveness will dictate your rate of growth.
Business incubators have become a common feature of public sector enterprise support in recent years; many of these establishments have proved to be highly effective in nurturing early stage entrepreneurs. They don’t just provide a desk and somewhere to turn up every morning, their added value comprises: a place to network, share ideas and collaborate. The really good ones offer mentoring and coaching, this is often what makes the real difference between success and me too performance. In many UK regions incubators have become a hot bed of exciting new businesses, the potential employers of graduate talent – Autonomy in Cambridge is a fantastic example.
This concept of incubation needs to feature prominently in the culture and mindset of winning businesses – any ambitious entrepreneurial company should have a “department” or function responsible for building a pipeline of new thinking that delivers potential new revenue streams or adds value to existing customer experiences. I don’t mean a department literally – it’s about having an organisational process that brings together thinkers, doers, sellers and controllers, one that not only develops new ideas but also implements the commercially viable nuggets which emerge from the process of discovery. The concept of incubation delivers a major thrust for gaining an edge in the market place.
It is my opinion that creative intelligence is the ultimate source of competitive advantage – high growth companies tend to be disproportionately more innovative than the rest of the SME population. They explore, embrace diversity, live in their customer’s world, experiment with new possibilities and avoid complacency by making creative thought a habit, not something they do once a fortnight on a Friday afternoon. It must form part of an organisations “soul”. My next few blogs will explore some simple yet highly effective ideas for embedding a culture of incubation.
I was really honored to be asked to present the fast growing business award at last weeks North of England Excellence Dinner. The winner was 3P Logistics and at the end of the ceremonies I made a beeline for the winner, Ian Walker, I wanted to get his view on what it takes to build a high growth company. It was clear the moment Ian started talking he had a passion for his business that was off the scale – it created an instant engagement which meant you had to listen to what he had to say. The guts of his story provided a truly fascinating insight into the motivators for setting up and growing a business. As well as passion, courage and bravery feature high on the list of special qualities – leaving a highly paid job when you have dependants can be an extremely scary moment in life, this is what sorts out the true entrepreneurs from the dreamers. This takes an enourmous amount of guts – fear is what holds so many individuals back from taking the leap.
A few years down the line new dilemmas and challenges are presented to entrepreneurs like Ian. They become most profound at the point when the company is providing a comfortable life style – the internal conversations usually goes something like this, do I take more risk and go for it again and build an even bigger business? However, so few are willing to subject themselves to the burdens and stresses that got them to the well deserved position of a regular salary and the associated benefits that come with being your own boss.
Well my advice for those who decide to continue going for growth is, find a mentor first, someone you trust, then together work out how you are going to do it – the following are what I refer to as “The Essentials” –
- Become future focused and prepare a strategy and game plan which sets the course for the next three years
- Understand the best ways of financing growth, one that balances personal risk, commercial gain and control (or loss of control)
- Effective leadership is core to success. Building a team/organisational structure you can rely on to support the business transition is vital
- Embed disciplined management systems to provide an effective barometer of commercial performance – the bigger you get the tighter the controls need to be
- Ensure you have created a customer focused culture, one that delivers innovative product and service propositions carrying higher margins
- Ensure you have a differentiated business model – one that creates real competitive advantage to support domestic and possibly international growth
- Condition your mindset to win and success.
- Ensure you have the support of your partner and immediate family
Having trusted advisers and being part of a network of likeminded people becomes an important part of the journey it also helps to maintain your sanity.
This was an interesting piece of research I picked up today. Not sure of the source but I have heard it quoted before – an amazing 8 out of 10 people have little faith in their leaders. My view is that a leaders life can be a very, very lonely one, an existence often plagued by uncertainty and challenge, particularly in difficult economic times. Those individuals that have the courage to go out and start their own business regularly find themselves with a whole raft of unfamiliar issues to sort out. Ones that no course or workshop could ever train them to deal with.
This gives rise to the whole issue of followership. My recommendation to those who constantly judge their leaders is, give them a bit of space and look at things from their point of view. Many of the successful entrepreneurs I have worked with have benefitted from a close network of colleagues who follow, help and contribute to problem solving they act as a crutch in time of need. The last thing they would ever do is back bite and constantly judged what and how their leader goes about their business, they add value and support forward thinking strategies.
Maybe the 8 out of 10 should try it for themselves and see how it feels? Growth can be a lonely ride.
How often do we lose the plot with our businesses? It is so easy for confidence to take a turn for the worst. Here are my top ten tips for making a complete cock-up of your business:
1. Let your ego take over when things are going well. Your head will get so big getting through the door becomes a challenge
2.Lose sight of the short-term issues such as cash and the customers world
3.Dont bother to look to the market horizon, just convince yourself everything will stay the same
4.Empty the till every year when you make profit and fill your pockets with the dividends – an investment in Spanish property seems like a great idea.
5.Allow underperforming staff to carry on underperforming – just convince yourself that things will get better. No need for a one to one home truth chat – that may just seem like confrontation.
6.Convince yourself that your website, social media and other marketing activities will do the trick for winning new business. Spend less time in customer face to face meetings and keep on sending the emails. Avoid picking up the phone because customers will knock on your door
7.Make price your competitive advantage and keep lowering them to win the business.
8.Avoid investing in personal development – embrace the mindset that all that stuff is for tree huggers
9.Ignore the opinions and views of staff/colleagues views and stop communicating – you know best.
10.Monthly management accounts and KPI’s will sort themselves out – leave it to luck and avoid driving the bottom line. People should only be expected to work 9-5 its important for their work life balance, after all its your duty to keep everyone in a job.
I could go on. Of course I am not guilty of anyone of these easy steps because I know it all. What was point 1 again? How familiar does this sound? We all should take a reality check and take stock of whats going on in our business and marketplace. Self awareness and humility are a pretty important component of leadership – so is saying things as they are. The minute you try to please everyone you please nobody.
We hear so much about how important it is to create the right culture within an organisation. I prefer to refer to it as the organisational spirit. A bit like the wind you can feel it but you can’t see it – there is however, no doubt, that it’s there! I believe that the spirit of any organisation can either attract or repel – customers, good staff, suppliers, partners and other stakeholders. It is so obvious when you walk into a company that has great spirit – its fun, a great place to be and the environment is conducive to innovation, progression and success.
Creating the right spirit is down to the leader and founders. It is not easy to achieve, in fact in really hard, to create a great spirit – but when you get it right, it helps your organisation to progress – at the coalface selling is made far easier. Customers love to buy from organisations they like or admire. The spirit is created through:
1. Embedding values that everyone buys into
2. Having a cause and a purpose that brings value to the customers and stakeholders being served
3. An environment that encourages ongoing learning and personal development
4. Applying innovation across all functions and processes
5. Allowing everyone to be heard and respecting everyone’s views
6.Positive talk and outlook
7.Having a laugh – dont take life too seriously – fun is so important
Get the spirit right and you just attract positive stuff – when staff are happy they treat and look after customers in the right way. This has a profound impact on business performance and growth.