Insights Archives - Page 2 of 16

Growing your company, despite the uncertainty in the world: if your business is not growing, it’s dying!

Written by Lindokuhle Ntombela on March 8, 2022. Posted in Asset of Value, Insights, Scale & Grow.

If you are not growing your company, you are dying. The war in Ukraine, global supply chains, microchip scarcity, remote working, COVID, and inflation will kill your business… if you allow them to!

Inflation in a business is like cancer in a body. It’s often not detected until it’s either too late or requires a massive effort to eradicate and remedy. The best way to understand how it works is to think about R1,000 and what you do with it.

Say, inflation is running at 5%. If you place it in a current account, no interest is payable. At the end of the year, that R1K has the buying power of R950, and at the end of the following year, it’s worth around R900 and so on. Alternatively, you could place your R1k into a money market investment offering 4.5%. That way, before tax, you maintain the purchasing power of that money over the year. It’s worth R1,050 at the end of the year and so on. But the problem, of course, is tax and its impact on your purchasing power. That R50 interest earned can only be worth half of that, depending on your tax rate, but in any event, it still sees your money eroded. So here is the problem: many business owners don’t run calculations like this. They are too busy contending with the many challenges in the business environment. Their heads are also full of the deafening, seemingly relentless noise created by the information overflow generated by local, national, and global events.

But you leave it in your current account because you need to have it at hand.

In this podcast, Pavlo Phitidis discusses how your business may thrive in today’s economy, where the business environment, political environment, and global environment all play a role.

Why do you need to have it at hand and readily accessible?

Plan to plan, but no plan yet.
This is likely to develop a growing aversion to risk as well as a mindset that only ever sees risk. If you are here, either sell your business or get some help to get into the next option below!

The plan to sustain
Do what you’ve done until you have an idea of what you want your business to be. Whilst it’s better than not having a plan, it’s not good enough. The reason is simple. In your industry, you have competitors that are planning and acting on their plans to grow. Their growth erodes your business.

Make plans to expand.
Turn an idea into a plan, a plan into a document, the document into action. Or, even better, you can anchor your business into the future by defining what your company needs to be: an Asset of Value™. You engage your leadership team to set the 3-year plan and your operational team to develop the 1-year plan. Once all are aligned, you work with that team to break the year’s plan into quarterly milestones (measured outcomes over time). Once done, you create a budget. Once done, you delegate and assign the budget.

In this economy, business environment, political environment, and global environment, it’s tempting to feel overwhelmed, small, insignificant, unworthy, and incapable of growing your company and fulfilling your dreams and ambitions. Many people retain the shroud of an imposter, seemingly in control, up and at it and succeeding. The Jekyll and Hyde conflict exists in everyone – you are not an exception. It’s valuable to acknowledge and embrace. The frustration of this world must turn into anger. That anger must turn into positively inspired action. This is the turbine that propels action to make a difference and create a reality different from what we are told makes up the world. It’s a choice, and it’s in everyone’s power and self-interest to make it so.

Delegation demons that reside in us all

Written by Lindokuhle Ntombela on February 23, 2022. Posted in Asset of Value, Insights.

Without a team, you have a job. Ask yourself – what happens when I’m not there? And if the answer is nothing, then that is a job. If you want to rather build a business, then you need to invest in and build a team. It’ll change your job into an asset. And that is a business that can be sold, monetizing your years of effort, risk, and care.

To build a team, you must learn to delegate. To get it right, many of us must slay several demons that reside in us.

Pavlo takes a look at a few of them in this podcast from The Money Show, and see which ones reside in you.

The Adrenalin Junky

I don’t want to delegate because I get meaning from working hard and being very busy. I love it when people say how hard I work, because it makes me feel like I’m making things happen, big time.

The Speed Freak

Nobody can do things as fast as I can. It takes more time to teach someone something than just get it done. And I’m good at it too!

The Saboteur

I don’t want to see anyone succeed beyond me or perform better than me. I’m going to set them up to fail – consciously or unconsciously. I’ll set targets too high or delegate something and then take it back repeatedly. I might even exclude some of the insights or activities that you’d need to succeed in the task I’ve delegated to you.

The Perfectionist

Well, nobody can do it as well as I can. Nobody is good enough. I’ve always said it: if you want something done properly, do it yourself!

The Cynic

My people are useless. and helpless. They show no initiative and don’t care about anything other than their paycheck, lunch, and public holidays.

The Paranoid

Nowadays, you can’t trust anyone.

The Empty Nester

If I delegate that, what will I do? Where will my value come from if I don’t perform the tasks that I do if they are delegated to someone else?

The Superhero

Only I can do these tasks. I invested in the product. The service was my brainchild. You need special skills and insights, and this belief makes it impossible to delegate.

The Imposter

I delegate lots of things and expect people to get them done. I’m not sure how, what, why, and all that. They should just use their initiative and figure it out. Why can’t people just apply themselves and figure it out?

The Micro-manager

I delegate things, but I find you really must watch everything that people do when fulfilling the tasks. It’s the little things that make the big differences, and you constantly must be on your people to make sure they do them right.

Several other demons reside in us as business owners when it comes to building a team and working with our people and colleagues. Should you be growth-minded, each of the demons will show up, and your job is to ensure you slay them, one by one, to constantly build and lead your team better. It’s the answer to growth, innovation, and building your business into an Asset of Value™.

Getting new employees up to speed and returning value

Written by Lindokuhle Ntombela on February 10, 2022. Posted in Insights, Scale & Grow.

The economy is emerging from the Covid slump; it’s the beginning of the year – there are a lot of new hires. So how do you get new employees up to speed fast and effectively?

Employees are drawn to different companies because of their distinct characteristics, whether it be the company’s remuneration package, culture, or growth opportunities within the company

What’s going through the employee’s mind.

As is—”re-alignment to the new company and its model and structures.”
As was – “It’s not like the past, company, it’s different here”
Still settling—”I haven’t settled yet, but I’ll get there, or will I?”
Constant flux – “Will I make it past the first 3 months the way things are going?”

Every employee needs a structure for them to get their work done. When there are systems in place to help the employees reach their full potential, it will be easy to settle.

If you build your business on solid systems, you will be able to make use of the right technologies to automate your business systems. The trick is to first build those systems manually and automate them in stages for the employee and the business after this. The implementation of good business systems will result in business achieving scalable and sustainable growth with the new employees and across all areas of the company.

Listen to this podcast from The Money Show where Pavlo Phitidis discusses how to get new employees up to speed and returning value.

HR System

Job Description

This must say exactly what you want the person in the role to deliver. It must thoroughly define what the person must come in to build, run and be responsible for.

It’s even more important to make sure that the new employee ticks the following 3 blocks:

The right Fit – they must fit into your company in terms of its culture, values, work ethic
The right Skills set – they must have the right skills set for the job they’re hired for
The right Aptitude – they must have the capacity to be easily adaptable (change is still on the cards)

Recruitment

A clear and accurate Job description will play a critical role in searching for and selecting the right candidate for the role.

On-Boarding

Training – what and how

Its important to make sure that you prepare a safe landing for your new employee. Make sure you understand the system they will be coming into fully and how they will fit in it so that it becomes clear from the get-go what it is expected of them. Failure to do the onboarding process effectively and provide essential training that enables the new employee to be effective in their role will leave them feeling like a misfit in your organization and lead to their loss of confidence in their own ability to deliver desirable results within their new environment.

Performance Management

Measurement

Without the measurement and management of performance in your organization, you will not be able to gauge your organizational performance. The key here is to ensure that performance is consistently and fairly measured for all employees. Most importantly, good performance must be rewarded, and there must be consequences management for non-performance. This will help you retain good performance and help you weed out non-performers.

The personal cost of leading a standard of excellence

Written by Lindokuhle Ntombela on February 3, 2022. Posted in Grow & Exit, Insights, Succession.

Resurrection is a very long, five-season series about the establishment of the Ottoman Empire. The central character, Etugrul, faces unbelievable ordeals to seed the Turkish State. It’s set in 1200 AD and cleverly presents the many, many challenges the hero must overcome to make it all happen. Among all the bloody battles energized by corrupt, nefarious characters, the toughest was his discipline of his childhood friend and closest, most loyal confidant, Bamsi.

Etugrul directed Bamsi to hold a position in a battle and then followed him to conclude the main battle. In the chaos, Bamsi decided to chase the Mongols who intended to kill their horses, which would have left them all trapped in the Mongol territory. He saved the horses, but Etugrul faced a major battle without backup.

Back at his tent, Etugrul stripped Bamsi of his rank and title. It was painful and dreadful to watch. As a leader, he had to communicate through this action the principles and standards that he had set, his tribe stands for justice. Walking the talk came at a high cost.

Listen to this podcast from The Money Show where Pavlo Phitidis unpacks excellence in business.

Can you afford not to set a standard of excellence?

It depends on how you see your life. The only things we control are the present moment and the future, and it’s all a personal choice. Many businesses generate income for their owners and create a good lifestyle. Few become truly excel despite having the potential to.

It’s a tough call to make.

A lifestyle business can certainly give you just that, a good lifestyle. As it suggests, work is work, and play is play. A balanced life is how it’s sold and very often actively and widely supported and promoted, challenging you with questions such as “how much is enough?”. It’s a subtle but determined intention to keep you at the collective level, since surpassing that collective level might imply comparative failure for those who don’t. Striving for excellence is equally a choice, and it’s far easier to make it if you love what you do and do what you love. This sounds ideal, but it’s not.

How do you set a path toward excellence?

Excellence needs to be superceded by a vision of what you want to achieve and why you want to achieve it. The cost of excellence becomes an investment in excellence and your life if it has meaning for you. And meaning can be fragile. If you find it, attach to it and don’t share it too widely. People will challenge it jealously, and on the tougher days, you can waver and allow doubt to erode it.

Next, you need to establish a standard of excellence. For example, in competitive sports, you measure your team against many others. What then sets your standards of excellence? Is it the number of clients or the rating from clients?

Motivating and engaging your team is essential to setting a path to excellence. If you have your leadership team inspired, and they in turn inspire their teams, you can, for example, challenge your team to raise the standard of their team by 3% per month. Twelve months later, that team is functioning at a 36% higher level of engagement. Three years later, your expectations have risen by more than 100%. Make the number 3% your mantra!

Succession

In family business succession, excellence is tested to the extreme. How do you involve your family in the company? Should you? If you bring an incompetent loved one into your business, what does this say about you, your vision, and standards? And how does it make your team, especially those committed to excellence, feel and rethink their futures with you?

Dealing with a rock star

Does a commitment to excellence allow you to have rock stars in your business? Top performers always want different treatment. The thing with standards is that they create the framework against which reliable, consistent, and dependable decisions can be made, and therefore leadership ones as well. Do you demote your Bamsi when the fragile principles and standards that everyone has come to rely upon are compromised in your journey to excellence?

“A 3% increase in standards per month adds up to 36% improvement in a year, and in 3 years you can raise the bar 100%!”

Invest where your business value is the highest.

Written by Lindokuhle Ntombela on January 31, 2022. Posted in Insights, Scale & Grow.

Where does the actual business value lie? Is it in the product, people, or processes? The lazy answer is that it relies on all three, but a deeper look into it might surprise you.

Product

Physical or service, the product of a business refers to what the business offers to solve a customer’s problem. Sourcing, developing, and building a product or suite of products is essential for any business that trades. This often creates a mindset that centers the value of a company on its product.

People

Pavlo says he’s “heard utterances from my team is everything to if you want something done correctly, do it yourself.” So, which is it? Without your team, you are not a business. A one-person or two-person business is one that you create for yourself. The team is vital to “SCALE & GROW”, and advance the size, profitability, and ability of a business.

Processes

The daily, weekly, and monthly activities that you need to perform across your business functions govern the customer experience, the team experience, the supplier experience, and any other stakeholder in your business. Without process, chaos reigns. Too much process creates a pool of treacle for anything new to happen.

The best approach is to adopt an investor mindset, something especially hard for any company founder or owner to achieve.

Listen to this podcast from The Money Show where Pavlo Phitidis discusses “product, people, or processes”

Products can and will be imitated and replicated by competitors. With time and money, their value erodes. People come and go, and skills are more available now than ever before. A mindset arguing that people hold the business value. Then if that’s so, where is the value in the business if people come and go? Processes create the experience behind every engagement with a business. If a good experience a customer, supplier, or employee has with the company is reliable and predictable, they will continue to support that business. To get this right means that you need to understand your customers’ needs, wants, psychographics, and behaviours. It means you need to have a definitive culture and set of values that attract and repel employees, leaving you with those that identify with your company and, therefore, customers. In the order of processes, these elements need good products to trade effectively.

This equation of business value….it all starts, and ends, with processes leading the value investment!

Business Strategy: The two strategies for your business in 2022

Written by Lindokuhle Ntombela on January 21, 2022. Posted in Grow & Exit, Insights, Leadership, Scale & Grow.

The Covid Era is not over – this is the covid decade! The storm will continue. For those businesses that have survived the last 2 years, there lies within them the possibility of making a success of the next 8 years. The important mind shift needed is to turn ‘hope for a better future’ into a business strategy to adapt. It remains critical for businesses to prepare for this year by having a clear end-objective in mind. The focus should be on why you do what you do and being conscious about the fact that as you cast your mind in the future, the path to get there will chop and change.

Listen to Pavlo Phitidis discuss this on The Money Show.

Possible business strategy:

Growth

“I’m growing despite Covid, the economy and politics”

There is a real opportunity to take up the market, to take up the customers, the products, and the opportunities that your competitors are not going to be taking up because most people will remain indecisive in this country, especially around their businesses.

Exit

“Because of my age and/or stage, I’m exiting”

Once the decision to exit has been made, build, manage and lead your business differently to make sure your business is buy-able and therefore sell-able.

Setting standards to achieve excellence in business performance

Written by [email protected] on December 6, 2021. Posted in Innovation, Insights, Leadership, Mindset.

Excellence is a journey because every time you reach it, you realize that the original standards you set, which you believed were a measure of excellence, are naïve and immature as you look ahead from a higher position than the recent peak you have attained.

Listen to this podcast from The Money Show where Pavlo Phitidis unpacks excellence as a philosophy to deliver your legacy as a business owner.

It’s very frustrating. That future position, which today you view as excellence, will be disappointingly below par once you’ve reached it.

Heisenberg understood this. He called it the uncertainty principle and it stated that you cannot measure anything objectively because as you measure it and get the results, it and the circumstances around it have already changed.

It’s a wonderful conundrum if you embrace and appreciate it and if, only if, excellence is something that matters to you. So where does it begin?

If we appreciate that we have one life to live, our personal philosophy about that life matters enormously. Time starts at birth, and marches steadfastly and uncompromisingly to death. Within that very short period, what do you actively want to achieve? And once you’ve defined it, at what standard do you want to achieve it? Of course, this is ethereal and philosophical but then so is life as a whole. Most people are born and die and leave little impact behind but for a few family and friends. There is nothing wrong with that, or is there?

However, for a business owner, it might be different. A business is more than a few family and friends. It is, in effect, an incorporated party with a life of its own, birthed by your fortitude and care and often driven by your vision. A vision of the business but equally, one of yourself and your role in society. It’s more than just economy, it’s also a legacy.

A few antidotes to eroding time as you strive towards excellence include:

Attain insights faster by setting more milestones rather than a few long-range big ones. Accelerate the cycle of evaluation and active questioning.
Anchor your activity in a goal. A big one. Test your truth by stating it to people. Create a measurable frame to measure your standard of excellence.
Get perspective. Draw off a source that can give a helicopter view and who can compare. Objectivity is key to prevent falsehoods or time erosion.
Recognize the measure that’s simplest and most objective – in a competitive environment, it’s often number of clients.

How do you build a business when capable talent is scarce or unaffordable?

Written by [email protected] on November 29, 2021. Posted in Insights, Operational systems, Team.

Skills are short globally. One of the big issues delaying the Trillion Dollar infrastructure projects in the US is the scarcity of certain skills, such as surveying.

This shortage of skills is not a problem if you don’t want to grow.

But unfortunately if you’re not growing, you’re dying because your competitors are doing everything in their power to grow. And new competitors are coming in all the time.

As an example, 282 000 people in the USA in the last quarter who lost their jobs through Covid didn’t file for unemployment insurance because they found opportunities to service customers using the skills and gaps they had seen in their previous employment! Many of these are your new competition.

If you want to grow, or understand that you have to grow, then build a business that lessens its reliance on skills that are scarce and expensive. These skills are usually also unreliable because if they are so scarce, they can move on to whoever is willing to pay them the most.

Listen to this podcast from The Money Show where Pavlo Phitidis discusses how to build a business that doesn’t rely on scarce skills and talent.

Structure determines behaviour. This means you must build a business differently to get the result you want. Find out exactly what problem you solve for a clearly defined target market, with a consistent, good experience, then build the systems that deliver that outcome reliably.

A system is a series of activities, in a sequence that can be measured and trained.

You can now hire people, not because they bring some of their own superstar ability to the role, but because they can be trained to operate the system.

This approach, of hiring system operators, rather than mavericks and gurus, has a number of benefits:

Recruitment is simplified as you can assess through simple questions whether someone has the experience or capability to perform the tasks that make up the system.
Your employees are motivated and have purpose as they know what to do, when to do it, to achieve a specific outcome. Their performance can be clearly measured and managed.
Your business becomes less reliant on you, as the systems that underpin it, are documented, trainable and don’t depend on a few superstars to get things done.

3 strategies to innovate fast, repeatedly, and profitably

Written by [email protected] on November 22, 2021. Posted in Innovation, Insights, Mindset.

If change is the new constant, responding to it will not win the game. Driving change so that competitors must react and play by your rules is a better approach. Put differently, innovate, or die.

Listen to this podcast from The Money Show where Pavlo Phitidis unpacks three strategies to drive innovation in your business.

Innovation shapes itself differently but ultimately offers one of two outcomes. It all begins with the “something”. You are doing something better with what you have or doing something better with something new.

What to innovate?

Here are three simple strategies that you can use to yield the most effective innovation that can and will be implemented, fast in your business every 6 months.

Suck

From marketing to operations, sales to procurement, your employees are active daily. They are performing activities to get their jobs done. Engaging with them to understand what actions they perform and how they perform them opens a conversation on how things can be improved. Often, the tedious, mundane tasks are the first ones your employees will volunteer for improvement. And often, these tasks lend themselves to either digitization or redundancy. Across your business, these conversations yield insights into the many minor process improvements that add up to create a more efficient outcome and motivated team. Imagine one such innovation each month. Then imagine the impact over 2 or 3 years. Besides preventing cholesterol building up in your business systems, you build a culture of accountable innovation that gets implemented as it’s built.

Pull

A growing company in a competitive environment is relevant to its customer’s needs and wants.

Needs solve a problem through your product or service.
Wants create the experience your customers desire.

They are miles apart! The benefit of positioning your business like this means that your company is built from the customer back to the product or service, not the other way around. Immediately this opens the door for conversations with your customers that go beyond a blow-by-blow product advantage over competitors. It talks more to the problem that your customer has that you solve and the experience they want to support you. When things change, for example, legislation, competitors, technology and other, the status quo of your customers change. The problem might get bigger or appear faster and the experience they would want in return would change too. As the business owner, identify your 5 toughest customers and build a relationship with them personally. Be sure that besides being demanding, they are themselves growing. Tough, awkward conversations become insightful inspirational conversations if they are intentional and enhanced by a genuine investment in relationship. It’s these conversations that identify the earliest signals of change and insights into how the experience your company generates needs to change to keep ahead of them.

Push

Across your supply chain, sort your suppliers into three categories of importance.

Vital
Important
Helpful

Then, within the vital and important categories, arrange to speak and meet with senior managers or owners to set an annual coffee conversation. That conversation must center on you learning more about the product or service your supplier provides you with, what changes are driving innovation in their businesses and how that will change and shape their relationship with your business. What you are looking for is how their innovation can drive yours through your supply chain.

In all three strategies, the relationship-driven engagement will yield the most uncomplicated innovations that you can make with the greatest degree of follow through and execution. If time waits for no-one, and if change is the only constant, innovation needs to lead, not respond to that of your competitors. Develop this system and implement it as religiously as you’d do your month-end billing.

Aristotle said it “We are what we repeatedly do. Excellence, then, is not an act, but a habit”.

Why and how to get outsourcing working

Written by [email protected] on November 3, 2021. Posted in Creating time, Insights.

Recently Pavlo was asked: “Business is picking up nicely from last year. I find myself outsourcing more of my business functions to keep up with my delivery. When should I employ more people and insource if the current outsourcing model seems to be working well? Is this strategy sustainable?”

Listen to this podcast from The Money Show where he responds in a discussion how to design a solid outsourcing model that can enhance your business’s growth.

Why did you outsource in the first instance?

The lockdown shock should have forced most businesses to focus on capital preservation and shedding costs as a result. After that, the following action ought to have been resetting the business to meet the new reality. A harder-to-find customer, more apprehensive and skeptical, nervous of spending. Once you get that right, it’s all about rebuilding your business in such a manner that it responds almost instantly to the shifts and changes in your customer behavior. This is all about keeping the focus simple and your business agile. What you used to do in-house that was outsourced to lighten the cost load and risk in the business saw many of us outsource services.

How did you outsource to get it working so well?

We spoke about the onion method on previous occasions. With 3 layers of inner, middle, and outer layers, use it as a framework to outsource. What is core and strategic to your existence, you own and never outsource. What is strategic but not core, you outsource to a matching partner whose service you are buying is core and strategic to them. This requires a medium-term commitment and takes the form of a strategic partnership rather than just a service provider.

Can you correlate your growth to outsourcing?

If your model is working well, why? A good partner is only as good as the service they provide. That service is only as good as you have defined and delineated it and how you empowered your partner to succeed at delivering it.

The entire automotive industry works on this basis through tier 1,3, and 4 suppliers. Using a combination of JIT and Kanban systems, the provider of tires knows precisely when and how to deliver the individual set of tires for a car on the line. Supplying and delivering tires Is outsourced in terms of inventory, storage, delivery, etc. This drops the cost of car manufacturers and keeps that car affordable.

In our business owner’s world, the simpler operating model, due to a tighter and narrower focus on core and strategic activities, a well-defined outsource requirement, and partner selection means that he can keep his eye and attention on fewer moving parts. Simplicity is scalable, and scalability is growth.

Does it affect valuation?

What makes your business special, how it works, what makes it happen, are you growing, and what’s your role? 5 levers drive valuation. A well-designed outsourcing model that great strategic partners service helps each of these levers to support your valuation.

Let’s correlate the outsourcing example to each of them.

Special – a business that is expert in understanding and engaging customers distinguishes itself from it competitors who rely on product and price advantages
Function – fewer moving parts make a simpler business improving its efficiency and productivity
Team – a simpler business allows for a more coordinated and integrated team. Of 10 000 surveyed companies that wanted to grow, 95.4% of their employees were unaware of the growth strategy. Too big means too slow.
Growth – a simpler business means more time leading growth than running operations
Dependence – a simpler business is easier to transfer reliably

In all cases, outsourcing leads to a better final valuation and, as we all know, this is the end game!