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.
It never ceases to amaze me how passionate and animated entrepreneurs become when they talk about their business and what they do. To those listening it can come across as “in your face”, however, the reality is, most founders are just so proud of what they have achieved. Business and personal time are inextricably linked feeding each off every minute of the day.
The successful high growth entrepreneurs I have worked with often started their business because of a “calling” – this means putting something right, fixing a problem, chasing a dream of freedom, pursue a passion, wanting to make a difference or proving to others they can achieve something quite amazing.
So many entrepreneurs often forget that their business is also an asset with value. The danger is when the founders view their company solely as an asset. This creates inward focused strategies, lack of customer focus, greed, ultimately this will lead to only one place – a disconnection with the real world and decline. My advice is when the voice of the “calling” gets overshadowed by the asset, its time for rethink. A danger zone is just around the corner. Its about balance, of course a business must generate wealth, however it works far better and in my view becomes more profitable when its game plan is linked to a purpose.
That feeling of doing what you do because it makes a difference to others is probably one of the best you can have in your career, long may it last!
What an absolutely fantastic High Growth Foundation event the other night at the Imperial War Museum. Led by Michael Taylor with his usual charm, wit and insight, we had a great line up of speakers who had fantastic and inspirational stories to tell. Steve Oliver and his Music Magpie venture is a real one to watch in the Region, and success could not be more deserved, a really nice bloke. Steve speaks from the heart and his views on creating a loyal workforce with a culture of graft were well received. Deepak Jayaraman from Goldman Sachs articulated the benefits of mentoring and how the 10,000 small business programme can help in this regard.
Alexis Giles delivered a fantastic key-note and shared with over 200 delegates Google’s rules for building an innovative culture and gosh were they powerful, here they are:
- Ideas come from everywhere – everyone has a place at the table
- Share everything you can – create a culture of sharing new thoughts, no idea is a bad idea
- Hire smart people – they create a challenging culture
- Chase your dreams – create 20% thinking time
- Innovation is not instant perfection – have a go and refine
- Data is apolitical – provide the fact to evidence potential
- Creativity loves constraint – draws out new ideas quick
- Users not money – money follows the eyes
- Don’t kill projects, morph them – iterate till you get it right
Alexis was a real star performer and delivered some real value to businesses with a passion to grow. One of the nuggets I took away was the importance of embedding processes and systems as a company grows. Google are a shining example of how an innovative culture fused with discipline delivers excellence. The lack of processes and systems is what so often stunts growth, innovation on its own is not enough.
Alexis and the Google story was an inspiration for ambitious people – so chuffed she will be hosting our study tour at Google’s Mountain View complex in March 2012 – what an experience that will be. Its not all doom and gloom.
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.
A mentor is one of the most important tools in the entrepreneurs kit bag. Growth companies constantly reach forks in the road – so, which way? As your business gets bigger then hopefully the team you have created will help you to make the decision on which road to take. However there are often BIG decisions that are outside the scope of the knowledge of the guys sat around the table. Having a mentor – someone whos experience and judgement you trust can be a serious crutch on these occasions. Asking those very simple questions like, what would you do? How would you approach it? Who should I go and speak to? Who are the best advisers? – to someone who has experienced the scars of the pain you are feeling is all too often the answer. Every successful entrepreneur we have worked with (and that’s thousands) lean on someone they respect, all too often that advice comes over a beer or coffee. It’s not formal, it’s not shrouded in business plans and three-year P & L calculations – its good solid common sense.
The reality is that there are so many individuals out there who have succeeded in business and are more than happy to provide a helping hand – the fact is they have not been asked. The wisdom, experience and insight to help us make better decisions often comes free, from willing souls who just want to help others overcome the hurdles and challenges they face. The High Growth Foundation we have set up is living proof that members who are much further on in their journey are only too willing to give someone their time, experience and thoughts, without any strings attached!
So the conclusion is, if you are trying to grow your business find someone who has been down your path – invite them for a brew and use the magic words – please can I ask your advice. It could be the best couple of quid you have ever spent.
Most of the battles in business you have to win are in your mind first. Your mentor can help you work out your game plan and indeed make better informed decisions.
As I have said in recent blogs, high growth equals high personal risk. What comes with high risk is the need for a safety net that cushions any potential falls or scary moments encountered along the way. A CEO of one of the North’s leading companies stated this week:
What would have helped early on, would have been investment and advice from another entrepreneur who had already built and sold a business.
The safety net here is very clear – “advice from someone who has been there and done it”. Entrepreneurs need to operate in a safe environment, typically with those who get it! The notion of an entrepreneur being a nut case risking personal assets every day of the week is totally wrong. My experience is that great entrepreneurs embrace strategies that de risk the potential challenges they face (courage is a necessary ingredient because 100% de risk is not possible). Going forward hopefully public sector will roll out support that provides a safety net of been, there done, it operators who can encourage, motivate and help set clear direction. Being able to anticipate the risks and surprises ahead is what the stars of the future need.
My own personal experience of business support in the past has been that it was too light touch, lacking depth and credibility. Often delivered by individuals who had no empathy with a personal/business high growth journey. This must change in the future.