Author: pippa@aurik.com

Creating wealth through your business

Written by pippa@aurik.com on November 6, 2020. Posted in Leadership, Mindset, Succession.

Wealth describes an abundance of a desirable thing. It could be friendship, love, money, access to a foodstuff and so on. From the context of a Business Owner, what does wealth mean and how do you create it? In conversation with Bruce Whitfield on 702 and CapeTalk, Pavlo Phitidis defined the three components of wealth creation in the context of a private business.

BEFORE WE BEGIN, THINK ABOUT MONEY AS WATER

You are simply the custodian of it for a period. When you make it, you either store it or use it. Stored water eventually evaporates or stagnates. Used money is either wasted or generates more value for you.

In this context, a business should be built as a perennial spring. Well designed and built, it should produce water consistently. Your use of that water should be well considered. Fertilise and feed productive lands that bear fruit. Bad investment decisions see the money made lost like watering barren soil with old seed.

MAKE MONEY

Money in a business takes two forms:

FREE CASH

Money in a business sustains and grows the business. the money made needs to cover all your expenses. Thereafter, you pay yourself a salary to sustain yourself and your family. Any money left is profit, which should come to you as dividends or be used to invest in the business to accelerate money-making. This free cash can also be used to deepen the value of the business to generate future money. This happens by increasing the value of the business’s equity.

EQUITY OR CAPITAL

Equity holds the promise of money. It is in the value of the business should you decide to sell the business. Built right, a business can be sold and for a premium value to generate a capital gain. This will be the difference between the cost of your initial investment to establish the business and the price you sell it for.

As a business owner, you can build a business to either make money or grow equity or both. To get this right, you need to build your business into an Asset of Value. This is a business that has the following criteria:

It has a good strategy that sets it apart from competitors
It generates steady, reliable sales
It has a well-organised delivery capability
Its people are purposeful and motivated
Banks and funders love it. It’s saleable at a premium price on a clean transaction

Building your business into an Asset of Value will see revenue grow at a higher rate than your costs. This gap generates the free cash to make money in the business.

GROW YOUR MONEY

With money made, you need to now make it work for you by growing it.

You can grow it in your business. by making smart investment choices. This might mean an investment into plant and equipment or people and software etc. Many business owners make their biggest mistakes here. Knowing how to invest in your own business is not as easy as it sounds. You can also invest outside of your business into stocks, bonds, shares and other assets. In all cases, these investments must make money for you.

PROTECT YOUR MONEY

Get smart with insurance and tax management. Insurance, as annoying as it can be, protects you from probable and improbable risks. Imagine, for example, your fleet of trucks gets written off in a fire, without insurance to fund the replacement fleet. It will set you back years if not permanently. Also, some investment products serve to protect money drains like tax. You can legally manage your tax rate down on a personal level by investing in retirement annuities for example.

Wealthy people did not get there in a single generation. Nor did they get there through one activity. Sure, we read about some business people who cracked it and got lucky in a single generation, but they are, by far, the exception. Strategy and habit are what builds wealth. Strategy means being clear on how to make, grow and protect your money. Habit is doing and behaving in this way ove

RESET REBUILD REIGNITE ROUNDTABLE WITH PAVLO PHITIDIS AND THE GOOD THINGS GUY

Written by pippa@aurik.com on November 5, 2020. Posted in Mindset, Positioning, Uncategorized.

Starting this Global Entrepreneurship Week, Reset, Rebuild and Reignite your business to win in the new year and beyond.

Join business growth specialist and author of Reset Rebuild Reignite, Pavlo Phitidis for a roundtable discussion on how to build a business that is not only resilient to crises, but takes advantage of the changes that they present.

Pavlo will be joined by Brent Lindeque, The Good Things Guy, whose mission it is to find the positives amid the negative. Pavlo and Brent want to discuss resilient mindsets that can turn challenges into opportunities, and they want your stories to unpack.

Tell us what you did to survive the Covid lockdown – or any crisis that faced you or your business – and you could earn your seat on the panel to discuss your challenges and opportunities. Or just register to listen to the discussion and learn from those who have endured and come out winning!

The discussion will take place on Wednesday 18 November 2020 at 12h00

It forms part of Global Entrepreneurship Week, and Bargain Books is offering 25% off all copies of Pavlo’s books: Sweat Scale $ell and Reset Rebuild Reignite for the week, 16 – 22 November.

KVD: A FISHERMAN’S TALE

Written by pippa@aurik.com on November 1, 2020. Posted in Mindset.

American Kevin VanDam is one of the top-ranking bass fishermen in the world with two Major League Fishing Cups, four Bassmaster Classic titles, seven Toyota Tundra Angler of the Year titles and eight Angler of the Year titles under his belt. His winnings amount to millions of dollars and he is the beneficiary of major sponsorship deals. In this blog, we take a look at the secret of his success.

WHAT SETS THE TOP INDIVIDUALS APART?

Being at the top is a numbers game and bass fishing is no different to any other industry. All top sportspeople require talent, motivation, dedication and tenacity, but just like every other highly competitive sport, what separates the top players is a matter of percentages. Just as at the top level of professional sports every individual fulfils the minimum requirements of skill and practice, to rise to the top in any industry you need to gain the advantage where you can.

A NUMBERS GAME

“If you want to be the best, you have to do things that other people aren’t willing to do.” – successful Olympic swimmer Michael Phelps

There is little that separates the top players, so gaining the advantage is a matter of maximising what might seem to be minor elements. There are many variables with bass fishing including currents, wind, sunshine and landscape. Kevin VanDam ensures that he always has the advantage. He makes sure that he gets the best locations by visiting them ahead of time and assessing the terrain. He ensures he will be the first to claim the prime spot because he has the fastest engine in his boat. And he is better equipped than the competition because he has more rod racks and a wider range of lures.

Kevin VanDam also does something else that few others do: He invests in a coach. His coach provides alternative perspectives – from assessing the terrain of a lake where the season’s competitions will be held to consultations on lure choice and the rod actions that he practises. VanDam uses his coach to build trust in his approach, process and attitude and prevents himself slipping into doubt or a deep blue funk. In fishing, as in building a business, a few consecutive small failures have a tendency to do that.

“Becoming the best and staying the best means you need someone to talk to who understands your challenges and the pressure of competition. They help maintain perspective and prevent me slipping into habits or behaviours that prevent winning.” – Kevin VanDam

Success in sports and in every industry and business depends on many factors including having the right attitude, passion and motivation. But these things alone are not enough in a highly competitive environment. Insight is required to work the percentages and gain the advantage. If you’re not sure how to start, then get the right support. Aurik could just be the specialist that your business needs.

Manufacturing time in your business

Written by pippa@aurik.com on October 30, 2020. Posted in Creating time, Leadership.

The most precious commodity in the world is… time!

What are the consequences of having no time?

You have no time to think, no time to plan, and if you don’t get this right – you stay where you are. Everyday turns out the same way as the day before and you can’t move beyond it.

You also burnout if you get wrapped up in all the day-to-day details of your business, it becomes a slog and you lose your love for what you do.

It also erodes your self-worth, your ability to lead effectively, and thus your reputation – all of this damages the value of your business.

Pavlo asked 702 & CapeTalk’s listeners what they would pay for the formula to manufacture time in their business – listen to his response in this podcast from The Money Show.

People and activities eat time:

Customers, suppliers and to a large extent, employees take up a lot of your time. These people are located across the cogs that make your business work. For example the marketing cog: You have staff working on marketing; suppliers delivering to support your marketing and customers you are trying to reach through marketing. The same is true of sales, and operations. To create time, given the fact that people and all of the cogs they work on are inescapable – you have to simplify your business.

One of the most damaging effects of Covid was that businesses started chasing any whiff of revenue, even if it wasn’t close to their core business.

Pavlo’s warning is that if you’re not serving a very well defined solution to a clearly defined market – you introduce complexity into the business. This happens because you have more variables, more unknowns, new skills you aren’t familiar with, products that aren’t experienced working with.

Simplifying the business is key. Businesses that are turning around fastest are those that said: The change that Covid bought created an opportunity for us to narrow our focus to a new niche audience that has evolved who we can serve.

If you can simplify the focus of the business, the three big cogs: marketing, sales and operations simplify too.

Turning your physical service into a digital, online, e-commerce service

Written by pippa@aurik.com on October 27, 2020. Posted in Innovation, Leadership, Trends.

…and increase customer reach, engagement, and revenues

Once you start on a programme of digitization, it’s not a destination, it becomes a new way of looking at the business, and it changes the strategy behind the business.

Listen to the podcast of Pavlo’s discussion about digitisation from The Money Show on 702 & CapeTalk:

What drives change?

Opportunity drives change: Black Friday

Over R6 billion was spent on the Black Friday weekend last year, over R70 million online, and the biggest single amount was R10 067 400 from an overseas buyer who spent it on a service – an incentive package trip for his team. I

So it has moved beyond TVs, fridges and phones to services already.

Crises drive change: COVID

During the Covid hard lockdown we were forced to go online for all intents and purposes. This has supported progress to the 4^th Industrial Revolution.

More people than ever before have moved to online shopping. It may have taken a couple of attempts to get used to it, but Pavlo’s guess is that most of us don’t want to go back to the hassle of going in store, standing in queues, finding parking etc.

Even Business to Business brands needed to engage digitally out of necessity. Screens have become meaningful interfaces to now demo products and describe services. Explainer videos to articulate services have exploded.

The edge of competition is moving fast towards a place and space where you can have anything you want, the way you want it, where you want it, how you want it.

Competition drives change: Shampoo

The edge of competition is centered on thinking about how any service can be delivered in this manner.

You have to do things differently to remain relevant.

Pavlo works with a business in the USA, that has created a new way of selling shampoo. They believe everyone has different hair, and that your hair changes as you go through different life stages. They were up against massive cosmetic brands on the shelves, so they created an app. You take a photo of your hair, tell them a few things about yourself and your lifestyle, and the app then diagnoses and recommends the right product, and lets you buy it immediately for delivery.

And what happens if you do not respond to it?

A Kodak moment – A global brand that went from employing 16 000 people, to 300 because they missed the writing on the wall.
Irrelevance – when you don’t meet your customers’ needs.
Loss of talent – no one wants to be in a sinking ship
Loss of customers
Fall prey to competitors – they will take away your assets, staff and customers.

Lead it rather than be a victim of it and to get that right, here is your mantra for today’s show and the rest of time too!

DIGITISED, CUSTOMISED, SERVICE CONFIGURATION, BUILT, BOUGHT ONLINE, DELIVERED ONLINE/OFFLINE

Mass customization is a marketing and manufacturing technique that combines the flexibility and personalization of custom-made products with the low unit costs associated with mass production. Other names for mass customization include made-to-order or built-to-order.

Getting it right puts you on the front foot of where global economies are going.

HOW TO BUILD YOUR BUSINESS BY RECRUITING THE RIGHT PEOPLE TO DO THE RIGHT THING AT THE RIGHT TIME

Written by pippa@aurik.com on October 24, 2020. Posted in Aurik Business, Leadership, Team.

As a small business owner, your biggest investment will be your staff. How you hire, who you hire, and when you hire, will have the biggest – positive or negative – effect on getting your business to the next level or not. On The Money Show with Bruce Whitfield, Pavlo Phitidis outlined his approach to getting recruitment right:

WHY ARE YOU HIRING SOMEONE?

Hiring people is an essential component of business growth. Without people, you don’t have a business. You have a job – that’s you doing it all, all the time.

Hiring people should be done to free your time from the tasks that consuming your time the most and that are teachable. The free time should see you move onto the next set of activities to build or grow your business. This is possible because you now have the time to do this. But only if that hire sees the right person coming on board doing the right thing at the right time. If not, you get drawn back into the time-consuming tasks you hoped to free yourself from and carry a higher cost of an unproductive hanger-on.

Some business owners hire people to save them or the business. They believe that the hire has the skills or insight needed to ‘fix’ the problem that they think is holding the business back. Getting this right is a relief. Mostly, however, it is a disappointment and an expensive one at that.

Because both hiring motivations are right, getting it right is vital making hiring a key competence of a business owner.

BEGIN WITH THE END IN MIND

Effective recruitment begins long before you begin advertising to fill a vacancy. Building a detailed job specification is just the start of the process. Your job specification should include: activities that you can to train someone to perform; activities that integrate with all the other activities that enable you to deliver a defined customer experience and, activities that are measurable. When drafting your job specification, think deeply about what your ideal candidates would be like – their background, demographics, skill sets, and attitudes.

DESIGN AND DISTRIBUTE THE OFFER

Once you’ve drafted the job specification and designed the salary package you’re ready to offer to the right candidate, it’s time to advertise the offer. Ask interested candidates to include a covering letter and CV. Including a list of requirements for the application process is an initial test of your potential candidates; if they’ve read your advertisement, engaged with the content, and supplied you with everything required, they’ve proven that they can attentively follow instructions. Anyone who doesn’t follow the somewhat simple requirements listed in your advertisement, can be immediately removed from your list of applications received.

SHORTLISTING AND BRIEFING

From all the applications, create your first shortlist of candidates that best fit your job specification. Select only those who have followed your instructions and shown an aptitude for the type of business you run. Ignore the lists of achievements on their CV and look more towards their attitude and practical abilities.

Then, invite your top 20 candidates to a briefing session. Prepare and share a presentation about your business, the job opportunity you’re offering, and the performance requirements. Invite questions and take note of the content of those questions, who asked them and their responses. That will give you great insight into the people on your shortlist and enable you to shortlist even further.

INVITE APPLICATIONS

After your presentation and Q&A session, ask your candidates to complete an application form for the job opportunity. Within this customised application form, be sure to ask questions that will help you to test understanding, temperament, skills and character. This application form process will help you to assess how your 20 candidates processed the information you shared with them, responded to it, and then communicate around it.

SHORTLIST AND INVITE CANDIDATES TO PITCH

From the applications that you received, select your top 5 candidates and invite them to individually pitch for the job opportunity. Look for who has thought through the opportunity best and has you and your business in mind rather than what they want. You want a hungry, passionate person who believes in the business and wants to be part of its future. From the pitches, select your top 2 candidates, and then conduct in-depth interviews with them. That’ll help you to assess and decide who your ideal staff member will be.

MEASURING PERFORMANCE

Measuring individual performance is imperative, as you build your business. Before you and your new hire commit to long-term employment within your business, implement a 3-month probation period, during which you’ll be able to assess their performance, and they’ll be able to assess how well they fit within your business.

Use your internal systems to measure performance and provide support to your new hire, as they settle into being part of how you build your business. All through the probation period, assess their performance and build their capacity and capability to perform at the job. If they hit the performance metrics during the probation period and get on with your team and culture, you probably have your winner!

Image source: https://bit.ly/2Nd8ogq

ESCAPING THE PROJECT REVENUE TRAP

Written by pippa@aurik.com on October 23, 2020. Posted in Lead generation and conversion, Operational systems.

It’s an issue that faces any project or event-based business – they tend to generate bumpy revenues, which affects their ability to build momentum and secure growth funding. Listen to the podcast from The Money Show with Bruce Whitfield, as Pavlo Phitidis sets down a plan for business owners to escape the project-revenue trap!

WHAT IS A PROJECT DRIVEN REVENUE MODEL?

Any business that sells bespoke or customised work has a project-based revenue model. Examples include event management services to the supply of industrial plant and equipment. Securing deals like this are very appealing. They have lots of adrenalin and anticipation. It takes a real skill to win such deals because the value of these big deals is material. They can have some big numbers to them.

HOW DO THEY AFFECT THE TYPE OF BUSINESS YOU BUILD?

Depending on the type of product or service you sell, these deals require specialised skills. Typically, selling and securing a project, for example to build a piece of software to solve a problem or a massive mixing plant in an industrial bakery needs specialist skills. Specialist skills are by nature expensive. Often, the person with the skills is you, the business owner. You started the business because you had the skills to deliver this kind of product or service.

WHAT CHALLENGES DOES THIS KIND OF BUSINESS FACE?

There are numerous challenges including:

Skills – access to specialist skills to ensure that you can sell, secure and deliver the project
Bumpy revenue – its hard to secure reliable, predictable revenue. This makes building the business in an organised manner very hard. We refer to it as sine-wave-revenue. You spend your time chasing the deals because it requires your skill to secure them. Then, if you win them, you spend your time installing, delivering the product or service. in the meanwhile, there is no selling taking place unless you have a base of skills on board.
Funding – its hard to secure funding n these types of businesses. Funders want and need reliable predictable revenue to service debt payments.
Valuation – its hard to get a reliable valuation on these businesses. Valuation relies on free cashflow being generated over time. unpredictable revenues caused by the project nature of your revenue makes it hard to forecast a reliable estimate of the free cashflow.
Sale – it’s a tough business to sell. A buyer would need to have your skills to see themselves buying and running the business.

ESCAPING THE PROJECT REVENUE TRAP

To move into a different revenue model, one that offers more certainty and predictability is a good idea. Such businesses build momentum, enable planning and growth in an organised way and over time yield very attractive valuations. They make for very attractive investments – hence the term Asset of Value.

Here are a few of the many strategies that you can deploy to make this shift in revenue model. However, beware, it’s a painful process and it take time. be sure you want to move there too because there will be some tough choices to make.

Build products

Take a good look at all your projects. Identify the typical, most requested project. For example, if you are software developer, what is the most common problem that you find yourself building for clients. Correlate the projects against sector and industry. An important element of a product business is to have clear customer segment that you service and very well articulate problems that you solve. Create a workplan to begin building out the products. Try do this with a few of your client’s on-board right from the get-go. Allocate resources to this and deepen them over time. you will need a balance sheet to support this process. Those resources that serviced the project revenues are now going to service product revenues. These product revenues take time to build. Over time, as you deepen your product revenues, slowly switch the selling effort from project clients to product clients.

Augment your projects

This is a far easy route to take. Think about the automotive industry. They started by selling cars. Once bought, that was it. today, they have added a suite of additional services. From motor-plans to driving experiences to trade-in deals, they have turned a once-off event into, in some cases, a revenue stream that lives as long as you might.

A client who supplied pumps as and when to mining customers took advantage of the recession and collapse in the mining industry to turn water elimination into a service. using technology and I.O.T he no longer sells pumps used to eliminate water form the shaft, but rather, sells a service that sees him being paid per hectolitre of water pumped.

Deal make your volume

Because clients only buy as and when, look to deals that secure the as” right now and the “when” in the future. Its about selling to a client once and securing their further needs on other projects. For example, an eventing business could make a deal that offers a rebate on the future events if a client commits to 5 events in a year. do 10 such deals and you turn 10 projects with 10 clients into 50 projects in the year. the consistency of project acts to smooth your revenues.

These are some of the strategies we have developed for clients wanting to make the shift from project revenue to regular consistent revenues. Contact us and we’ll be sure to help you step beyond the project revenue trap.

Spend more time on your business and less time in it with improved business systems

Written by pippa@aurik.com on October 19, 2020. Posted in Aurik Business, Creating time, Operational systems.

We have seen a common theme emerging in our recent meetings with various entrepreneurs. As a business owner, you might be wondering how best to position yourself for the future amid South Africa’s junk status and unpredictable economy. You might be thinking about how to make the best of your business in this context, but also how you put yourself in the best position. You need your business to be a success without having to tire yourself out and being involved in the day-to-day operations. To be profitable, you must increase sales without spending more or allocating more resources. But isn’t there an easier or more efficient way of doing this than killing yourself by trying to be on top of every aspect of your business?

You are probably wearing yourself out thinking about how you can remain competitive and grow your business without having to spend so much time in the business to ensure things get done the right way at the right time…There must be a better way, there must be a system or example of someone else who has got this right.

The right stuff

To build a great business, you need to have a certain mindset and strategy that pertains to every aspect of your business, including business systems. Perhaps most importantly, have a plan in place that will bring your dream and vision to life. Make sure your plan is a bold vision for the future. You will have to spend a lot of time working on the ground, and having a vision will remind you of the end goal you are working towards. It’s important to keep an eye on the prize and be ready for the long haul. Learning from past failures equips business owners with the knowledge that is important for future decision-making and the experience will equip you with knowledge of the industry and deepen your relationships. And building on small successes will give you the confidence and momentum for the long haul.

We have the right tools

If you build your business on solid systems, you will be able to make use of the right technologies to automate your business systems. This will reduce your cost of delivery, increase your responsiveness and bring predictability to your service delivery. Technology (software and hardware) is cheaper now than ever and affordable for any business. The trick is to first build those systems manually and automate it in stages after this. The implementation of good business systems will result in business owners achieving scalable and sustainable growth across all areas of the company.

Don’t wear yourself out trying to do everything yourself, you might think you are busy driving the business but the business is driving you. Aurik has the tools for exhausted business owners to ensure scalable and sustainable business growth. If your business is systemised, you will drive it instead of it driving you.

POSITION YOUR BUSINESS FOR SUCCESS AND MAXIMUM IMPACT

Written by pippa@aurik.com on October 19, 2020. Posted in Leadership, Positioning.

Wing Chun Kung Fu, a style of martial arts, requires that you have a secure footing on the ground in all its defensive and offensive actions. This footing “anchors” you to the ground. It translates the force of your strike or block from your foot to your knees to your hips and torso to your strike or block. It lends integrity, strength and power to your action be it a kick or a punch.

Building and growing a business is no different. It all begins with positioning and leads all the effort and activity based on that positioning. Weak positioning or poorly articulated positioning will lead to misguided actions, investments, hires and decisions. It fragments and crumbles the businesses platform, leads to a life of chaos and frustrations as a #businessowner and will almost assure you a future where what you have built will never be saleable.

WHAT IS POSITIONING

This is all about what makes you special as a business. not in your view, but in the view of your customers. Not in what they say, as much as in what they do. that means, they say they like your service or product and they show it by returning again and again. They promote your business to friends and family. They turn their talk into walk.

WHY DOES IT MATTER

A well-built business that consistently gets to both the next level of growth and value is one that has been built of a clearly articulated, relevant positioning. It enjoys clarity and certainty in why it exists and how it will grow. Its “foot” is planted on the ground and points towards the direction that the strike or block needs to follow. The solid footing ensures that all the actions leading up to that strike are aligned, efficient and direct the maximum effort of the body’s movement into that strike.

These actions include marketing to generate leads, sales to convert those leads and operations to deliver the promise of the sales proposition. The team employed by the business understands how to work together, is well-coordinated and includes the right people doing the right thing at the right time.

A business that has no positioning or a poorly defined positioning can never direct and concentrate all its actions towards achieving its objectives. The actions would be fragmented and misaligned and the team would behave inconsistently and chaotically.

Poorly positioned business bleed effort, money and time since they are following an unstable footing.

WEAK POSITIONING STATEMENTS

When I ask most business owners what makes their business special, they say one of three things 99% of the time.

Product – they argue the merits of their product in terms of its features and benefits. They might go so far as to say that their suppliers or manufacturing approach is unique and special. These aspects make their product superior. It’s the product that they have, hold and own or represent that makes them special.

The origins of this way of thinking date back to the mid-seventeen hundred when Ralph Waldo Emerson said, “build a better mousetrap and the world will beat a path to your door”. This is to say that a great product will always create a destination for customers to come to you. In the 18^th century he was right. There were hardly any products around. Simply having one meant business!

Service – many, in fact most, say it’s their service. that they offer personal service and will bend over backwards to accommodate and please their customers. Service wins the day and they offer that.
Price – sometimes they argue price. Few argue that in fact because to attain price advantage over something in a competitive market is hard. If you are not in a competitive market, then price probably doesn’t matter in any event.

The fact is that seldom do any of these positions translate into a successful result.

Whilst each of these attributes may be true for a while, none remain true consistently. Money can build a better product, service is largely driven directly by the business owner (and that is not sustainable) and price advantage seldom lasts.

HOW DO YOU CREATE A WINNING POSITIONING?

Today, the world has become more fragmented and more individual than ever before in its trading history. IN 1922, Henry Ford produced the Model T Ford. He was quipped saying “you can have any model you want so long as it’s black”. Choices were limited then and more importantly, access to information and choice even more so. The trends today are focusing more on customised products and services than ever before and that is only going to increase.

In this world, spoilt for choice, customers want solutions to problems. These problems need to be lived, felt and experienced by the customers that a business serves. This means your positioning as a business needs to talk to the problems that you solve and who has them. If this is clear, then any marketing effort will contain messaging that resonates with the customers you want to reach. They will hear and identify with the problem that you claim to solve. Thereafter, any selling effort needs to demonstrate how your product or service will solve the problems you have articulated. Finally, the delivery of the product or service needs to create an experience that resonates with how customers, with the problems you have identified, want to be served.

It is the single most difficult thing to get right in a business. but when you do, all the actions that follow it will be aligned to generate momentum behind every investment and action you make in your business.

Working with Aurik, we revisit your positioning first. Once sure that it is relevant and clearly defined, we work with you to build all the actions your business needs to get to the next level of growth and value. Through this, we will ensure that you maximise your return on money, effort and time. Contact us today and let’s start the conversation.

Governance gets things done

Written by pippa@aurik.com on October 16, 2020. Posted in Aurik Business, Leadership, Team.

Here is the story, titled “Whose Job Is It, Anyway?”

This is a story about four people named Everybody, Somebody, Anybody and Nobody. There was an important job to be done and Everybody was sure that Somebody would do it. Anybody could have done it, but Nobody did it. Somebody got angry about that because it was Everybody’s job. Everybody thought Anybody could do it, but Nobody realized that Everybody would not do it. It ended up that Everybody blamed Somebody when Nobody did what Anybody could have.

The story may be confusing, but the message is clear: no one took responsibility, so nothing got accomplished.

It is a story that plays out often in organisations and companies and on teams—anywhere there is culture that lacks accountability.

Without governance, which sounds like a reall corporate, unsexy word, nothing gets done, it is essential to have in place but so often we don’t see this in businesses – until it is too late. Listen the the podcast of Pavlo Phitidis discussing this on The Money Show on 702 and CapeTalk:

Why does it happen

There are several reasons and some more common but seldom understood examples include:

How we start is how we build and finish it. You may start out of necessity, which means there’s enormous pressure to get cash in, to sustain your existence. Often, the idea you start with isn’t what it ends up being. But you’re so busy banging away at it, you don’t see that there are cracks forming between partners.
Patterns in a relationship start shrouded in expectations not reality. Once set, they are hard to break. It feels ‘unfair’ to change the deliverables years after they were set.
Inexperience or ill-discipline. Often governance is only implemented when a business partner has been burnt by a lack of governance prior – very often the business would have failed because of it.
The busyness blur, fragments and mixes the hats – shareholders, board of directors and managing directors, but in a small business you are all three and they all get mixed into one.

Why do you need it?

Alignment between parties

Pulling in one direction builds momentum; its scientific P=M.V. D ideated by Descartes and calculated by Newton and now us on this call.

Decision making

There are around 120 decisions you take daily in a business; most are in your head and others are in your activities and work. Some are strategic, some are functional and in that some impact one function, some all functions. In many cases, being clear which hat, you are wearing when deciding a course of action is important. A shareholder disrupting a function is out of line. An operational director, alone taking a decision that impacts the company’s asset value is equally out of line…unless they are one and the same and alone in the business.

Accountability

Who does what by when and how? These are the things that make things happen. If everybody in the business is not guided by a set of activities, that can be measured, then how can you be sure that what needs to happen is happening when it needs to happen. For example, when you deliver a big job of work and someone else was meant to invoice; them failing to do so because they were not clear as to who was meant to invoice fails the business.

Play to strengths

Time is scarce and playing to your strength is vital to get the best impact most efficiently. I prefer partnerships because it gets that delivered but partnerships, ungoverned, are sinking ships.

How do you structure a governance framework?

Recognize the 3 hats
Understand their interests
Determine across each domain, wearing the appropriate hat, roles, responsibilities, and actions aligned to the strategy of the business
Shape remuneration to reflect the value
Establish a delegation’s framework
Reduce it to a set of agreements – shareholders and employment

It is of course easier said than done. Mostly, it requires a facilitated process by an objective, dispassionate, experienced third party. Get one and get it done to secure your future in time, money, relationship, self-worth, and value.