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Most people are not surprised when a start up business fails. But it's not just start ups that grow to death; it's also a common cause of business failure for mature businesses.

Start-up businesses often fail because they are undercapitalised.  They grow until the money runs out and then they can't afford to fund further growth.  The banks refuse to lend to them as they have no history and no assets to leverage, and then they die. It's an easy trap to fall into. The entrepreneurial spirit that drives people to start up a business is often the same spirit that keeps them focussed on a growth path.  The mentality is that the faster you drive sales and bring in the cash, the more successful the business (and the entrepreneur) will be.  However, this cycle of sales and profit is missing two key components; financial, and cash flow management. A successful and sustaining business has all of these elements.

 

For the more mature business, growing to death is often the result of unplanned growth opportunities. It's ironic that seizing a major sales contract or a big new client can be your business's ruin but it's more common than you think.  More often than not it's an issue that business operators don't identify until it is too late. Read more…

This is the last instalment of Murray feature exploring activities from this chapter of Scaling Up by Verne Harnish

Point 1 - Help people play to their strengths.

Murray's Key Points

  • Consider what constitutes strength in this scenario – A strength isn't just something you're good at. Its only a strength if it literally gives you strength and provides you with boundless energy.  In turn; a weakness could something that you may be good at, but it drains the life out of you.
  • Focus your employees on activities that give them energy and consider diverting the draining parts of anyone's job to others that have an aptitude for these tasks.  It is possible that this might create new positions but if the result is a happier, more productive, and more loyal workforce, the switch will pay dividends in the long run.
  • Consider getting your team to document all the activities they either love (energising activities) or loathe (draining activities).  Ask them to put forward suggestions on how to overcome these challenges.  You will get a more engaged team that are automatically 'on-board' with any changes required.
  • Don't forget to apply this to yourself!  Focus on eliminating or delegating tasks that drain you.  From my own personal experience; I find getting bogged down in reviewing detailed tax returns frustrating and draining.  I had no energy left to think about clients' bigger picture dreams and goals and even less energy to go out and discuss this and possible solutions with them (what I really enjoy the most about my job).  I delegated this reviewing task to one of my team leaders who has an incredible technical mind and loves the detail (but finds communicating with clients draining and confidence sapping).  Win-Win for both our firm and the client.

Consider these traits when describing your team:

Good Manager - Speaks in generalities about his team… they are all hard-working, responsible, diligent and fun etc.

Great Manager - Describes each team member with specific details about their personality, strengths and achievements. 

Read the Except Read more…

Following on from last week - Murray explores the next activity from this chapter of Scaling Up by Verne Harnish.

Murray's Key Points

  • Identify what frustrates your employees and take steps to remove (or reduce the burden) of these frustrations.
  • Review your processes and procedures with an open mind for change. I am always challenging myself and my staff to look for better and more efficient ways of running the business and removing obstacles.
  • No-one likes having to work alongside "Bozo's".  Put significant thought into your hiring process (e.g. consider how a candidate's personality will fit in with not only you but also consider the dynamics of your team).  Will the new candidate inspire and motivate others or deflate and bring down team morale?
  • Fixing people issues within your team shouldn't stop at the employee level.  Consider if any clients are at fault of demotivating your team through unreasonable behaviour 

Read the Except Read more…

Following on from last week - Murray explores the next activity from this chapter of Scaling Up by Verne Harnish. 

Point 3 - Set Clear Expectations and Provide a Line of Sight

MURRAY'S KEY POINTS                                    

  • From within your business, think of the core values you exhibit, its brand promise, and the purpose of your business.
  • Think of what KPI's (Key Performance Indicators) your individual employees (and you) need to focus on to achieve the goals of the business. 
  • A great manager will give employees autonomy to find their own way of achieving their own goals/KPI's (within the boundaries of the core values and brand promise that exists within your business).
  • Identify quarterly priorities that need to be addressed to keep employees focused on achieving their KPI's.  Communicate these priorities with your employees and update them regularly so that they can clearly see progress is being made.
  • Identify a "Critical Number" that each employee or team can focus on fixing/achieving during a quarter.
  • Can your employees explain how what they're doing helps deliver on your company's purpose, strategy, and Brand Promise?

Read the Except Read more…

Following on from last week - Murray explores the next activity from this chapter of Scaling Up by Verne Harnish. 

Point 4 - Give Recognition and Show Appreciation   

MURRAY'S KEY POINTS                                    

  • Staff won't going to give you 100% if they feel no-one cares and appreciates what they do.
  • Thank people each and every day (why limit this to staff?).
  • Consider each individual's personality when giving recognition (some prefer one-on-one comments – others want it announced nationwide)
  • Consider all positive vs. negative interactions.  A ratio of 3:1 for work…..5:1 for marriages!!!

 Read the Excerpt  Read more…

5 Key tips to assist in growing your business

Murray has selected a chapter from Scaling Up that personally appealed to him: The Managers – Keeping & Growing (Educating) the Team. 

The executive summary reads:

"Once you've hired your team members, it takes great managers to keep them happy and engaged.  Failing to develop these managers throughout the organisation can become a major growth barrier.  We identify five critical activities that distinguish great managers and the routine s they use to educate their people – and we suggest that the term manager be replaced with the word 'coach' which more accurately describes the role."

To assist in keeping your talent (e.g. staff) engaged, Verne has developed 5 main activities that successful managers regularly employ.  In reverse order of importance:

5. Hire Fewer People but pay them more

4. Give Recognition and show appreciation

3. Set clear expectations and give employees a clear line of sight

2. Don't demotivate; "dehassle"

1. Help people play to their strengths.

Over the next 5 weeks we will take an excerpt from Verne's book on each of the 5 points listed above and use this as a discussion point in the hope that together (we are here to help you) we maximise the growth potential of your businesses.

MURRAY'S KEY POINTS - From excerpt point 5 - Hire Fewer People but pay them more...                                     

  • Money does not necessarily motivate all employees (consider flexi-time or work from home arrangements)
  • Have a documented, well thought out and rigorous hiring system in place to minimise time wasters and provide the best opportunity to scoop the best talent from the available pool (consider external HR consultants and/or self-educating  via Top Grading or similar)
  • Match your remuneration structure to fit the company's culture and vision (are you service focused or sales driven?)
  • Be flexible in your approach to employing staff

Excerpt - Hire Less; Higher Pay  Read more…

Scaling Up Your Business

As a fellow business owner (yes, we employ staff, pay taxes and have the same challenges as our business clients) we are always looking for opportunities to improve and grow our business, identify opportunities that ensure our firm is set-apart from our competitors.

Whilst we often rely on our own 'best practice' business knowledge by staying in touch with market developments and industry events; recently we have started looking further afield. We wanted to ensure that all our stakeholders (e.g. staff, customers, suppliers and directors) can clearly identify a point of difference in the way we go about our business which (we hope) will ultimately assist us in achieving our long-term goals.

To this point, Tom and I attended Verne Harnish's scaling up workshop to develop a roadmap of where we wanted our business to be in the next 10 years and critically; how to get there. After reading Verne's latest book (Scaling Up: How a few companies make it - and why others don't) we felt it made sense to implement a number of Verne's management practices in our own firm.

As Tom and I progress through improving our own business strategy we will communicate some of the more critical aspects of Verne's recommendations to our own clients in the hope that together; we can all 'scale up' our businesses and take it to the next level.

Murray Kilpin – Director

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