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Dying at your desk should be lauded

BUSINESS LEADER: Dying at your desk should be lauded

In this article, first published in Business Leader, Pavlo argues that retirement is for the birds, certainly if you are a business owner. Creating a business is hard.


I was recently absorbed in a debate about retirement with a highly accomplished business owner. Having started her business 26 years ago after a successful corporate career of 12 years, we met to talk about growth. But that’s not how it started. Originally, we were meeting to discuss her company’s valuation.

Our conversation felt light, fleeting, almost whimsical. Something was wrong. It was as if she was going through the motions of the conversation that she felt she should have.

You have no interest in selling your business,” I remarked eventually. She looked surprised at my comment. After briefly pausing, she said, “I’d hate to sell it. But I’m in my 60s, and the pressure is immense. Family and friends are asking why I want to carry on. The debates get testy when, in casual conversation, I talk about new products, new markets, and new opportunities.

What is the response when you do?” I asked. “When is enough, enough. Aren’t you being greedy? You have earned the right to retire and other such comments,” she said, smiling tentatively.

The business owner’s odyssey

These kinds of comments come from many sources:

  • Peers who are corporate employees that either face a forced retirement, experience work as a political battlefield, or have lived a life in a narrow functional silo
  • Friends or family who want more of your time or envy your achievements
  • In family business scenarios, your successors may well want to lead and take the business in a different direction
  • Other business owners who, as competitors or friends, have a different lived experience of building, growing, and managing their companies, and who, exasperated, want out and project their lived experience onto you
  • Finally, the ‘Joneses’, where the collective view of life is that you work to earn your retirement and that is a key indicator of success.

But here’s the thing. Most business owners I’ve met do what they do for more than the economy. Through their business, they find inspiration, meaning, friendship and purpose. These are the ingredients of meaning. And when work becomes more than economy and meaning becomes the greatest driver behind why you do what you do, retirement is not a likely ambition.

The art of legacy building

It may sound idealistic, but I’ve witnessed it repeatedly. I think back to the first real client I had 16 years ago. A successful industrial baker who, after 27 years, had built a respectable £5.8m annual revenue business and wanted out. Unable to fetch the price he wanted, and a need to retire with dignity and pride, we met to discuss what needed to be done. I asked why he wanted to sell. “Every day feels like a grind, a slog, and as much as I have invested in my team, I’m square and centre of daily, weekly and monthly operations. I’ve tried to delegate and let go. I’ve tried to work ‘on’ my business, not ‘in’ it. I’m fed up. What I loved has become a choke around my neck.”

He vented for some time, and eventually, we mapped out a path to attract the valuation he wanted. 16 years on, with annual revenues approaching £100m, he remains fully invested and at the helm of his business. Each year, I ask him, are you ready to retire? He laughs and says, “Next year.”

If structure determines behaviour, how you build and grow your business will determine how you spend your time and attention. Should you find yourself experiencing growth that is stuck or stagnant, or alternatively, chaotic, and complex, you will tire, and retirement will be attractive.

It’s not how it has to be. The right blueprint to inform the design and development of your business will release your time to focus on the things that feed your soul.

John Milton’s (1608-1674) sonnet, “on his blindness,” captures the idea beautifully. He argues that everyone has a talent, and the job of life is to put that talent into service of humankind. Creating a business is hard. Building and growing it is hard. The trials and tribulations are what create meaning and value. Retiring such a talent robs us all of future prosperity.

Dying at your desk, then, indeed, is a life fully lived.

There is more foam in the AI coffee than actual coffee right now

Elite Business: There is more foam in the AI coffee than actual coffee right now

In this article, originally featured in Elite Business, Pavlo Phitidis explores the notion that while AI may not propel your business growth in the immediate future, grasping its potential value and applications is crucial for maintaining a competitive edge.


Recently, I grabbed a to-go coffee between meetings. As the coffee arrived, I tapped and left. It felt light, given the size of the cup. I lifted the lid and stared into the foamy abyss. Using the wooden stirring stick as a dipstick, I realised my large coffee was 70% foam!

It’s much like the current hype about AI.

If the job of a coffee is to have the caffeine keep you racy, pacy and alert, why the big cup if it is 70% foam? We buy with our eyes, and the psychological economics of different cup sizes and price points makes for smart retailing. 

The same triggers in our brain that let us buy with our eyes activate around the AI hype feeding hope and fear. And the world of AI did a great job of it with the introduction of ChatGPT earlier this year. And that is where it feels like it has stayed.

In response to the impact of ChatGPT, we sprang into action and spoke to our teams. The message was clear. You’re fired if you ever approach me with a question that ChatGPT could answer. However, if you ever come forward with an answer that ChatGPT provided and that you could not explain or argue, you’re equally fired. Two juxtaposed positions are dramatised for impact but point to a simple, clear message. Get with it on tech, or you are no longer relevant in the world of future commerce, and that future is now.

Mindset matters, and adopting the right one to technology is essential to stay relevant and solvent. But mindset on tech is not enough to use it effectively and profitably.

Over the last 6 months since ChatGPT sprung into the market, we’ve reviewed multiple AI solutions or strategies proposed by clients across most industries. By far, most have been theoretical in value or moribund in reality. I write from the position of established mid-sized businesses with annual revenues between £5m-£75m.

Theoretical in value

Be it the hype, noise and thousands of AI hack infographics on LinkedIn; videos on YouTube and articles in the digisphere, the world of possibility is interesting but not practical. From taking jobs, doing jobs, and creating new jobs, what started fast has slowed as quickly. Bringing real productivity gains into your business without losing a distinctive personality remains a hope and dream rather than an accessible, practical reality. Building AI is hard and expensive, monetising it across a broad landscape through SaaS offerings and overcrowded app stores is harder. 

Moribund in reality

Already, ChatGPT feels like it’s entering this categorisation. Has it become dumber? The quality of answers it offers on mostly similar questions I asked over the last 6 months has waned. It has left me wondering if a suite of privacy interventions has compromised its ability to generate more meaningful and robust answers. Even prompt engineering hardly distinguishes one answer from the next. Across marketing, content generation seems to have peaked already, with little or no impact on the cost and investment in time and money to use the ocean of AI options.

A profitable reality

Across more than 3,000 companies, we see an approach, rather than a neat AI app, win the day on digitisation and AI solutions. However, it’s not about a hack or infographic on bringing AI into your business profitably. Like most successful acts in business, it goes down to the basic principles of what informs your action in building your business and step-by-step patient work.

First, know what business you are in. It has nothing to do with your product or service whose sole job is to solve a problem for your customer. It is all about who that customer is. Broad definitions of customers harm your ability to get this crisp and clear. Narrow definitions of customer are notoriously hard to get right. Yet, they are the blueprint against which your business should be defined, built and shaped.

Second, articulate your commercial activities, processes and procedures using this blueprint. How they are designed and implemented must be determined by that blueprint. The smart way to do this is with your team. Their involvement will create ownership and accountability as well as measured outcomes.

Finally, these activities hold the key to digitisation and AI adoption. Whether across marketing, sales, fulfilment, administration or procurement, inefficiencies and dull processing requirements are the first areas that lend to digitisation. Try it with your functional teams. Ask what is the most tedious part of their job and start there. Take that activity and see how it can be digitised using off-the-shelf or native software. 

Don’t put the horse before the cart.

What is critical in this process is that you start at the beginning and define your business. For example, adopting software to digitise a marketing or sales process not designed and characterised by your customer segment’s behaviour creates a generic experience. Perhaps we no longer respond to canned marketing emails or automated sales engagements. If you start with the software, you will build what everyone else already has because they use software to create structure and systems, not the lived experience of the people in the organisations that engage and buy answers to problems. 

AI is exciting. We have baked it into our platform across 3 areas. It’s working okay. Each week, it gets better as we learn its limitations and potential. Adopting technology is a vital act of leadership. Leading it, adapting it and recognising that it does not hold all the answers but will hold many opportunities is a critical mindset.

Rituals, routines, habits: The blueprint for transforming your business growth

BUSINESS LEADER: Rituals, routines, habits: The blueprint for transforming your business growth

In this article, first published in Business Leader, Pavlo shares Rituals, Routines, and Habits: The Blueprint for Transforming Your Business Growth.


Once your business has achieved a ceiling of performance, how you invest your time and attention determines your future success. To understand how we invest our time and attention, we can look at the habits that drive us, consciously and unconsciously, every day. Our habits form behaviours that manifest both good and bad outcomes.

Habits form when you do something that makes you feel good and can be initial and ongoing. Here’s an example of each.

A cigarette makes you feel good when you light and drag on it. You might feel awful after, and swear to stop smoking, but you won’t and don’t. I’ve observed this as a non-smoker for years. So why did you start smoking in the first place? Was it to be cool or fit in?

Whatever it may have been, you likely developed a habit around it – a morning and evening smoke or when things get rough in life. Mostly, you don’t even think about it. You light up and draw, reminding yourself that you are going to die one day or promise yourself you’re going to give up next week.

A good habit might be brushing your teeth twice a day. Don’t do it and feel uncomfortable. Do it, and you feel virtuous, clean, and fresh. You likely do it now without even thinking. It’s a habit.

Both are mainly unconscious. You do both whilst thinking or doing other things. And yet, these acts bear consequences. They shape your future despite your aspirations and intentions.

What does this have to do with business growth?

Upon reaching a certain level of business performance, your time and attention, more than money, skills, strategy, and advice, are the greatest determinants of future growth.

Understanding what guides your time and attention becomes the most critical insight into your company’s future and leadership imperative.

There are primarily 3 drivers:

Rituals

These are considered actions and behaviours intended to yield a clearly defined outcome. For example, 20 min of exercise, followed by 10 minutes of meditation first thing every morning. It is deliberate, purposeful, and practised.

Routines

Patterns of behaviour set by circumstances. For example, a weekly routine that sees you go to work differs from a weekend routine that does not. In each case, the routine is governed by the day’s or event’s logistics and requirements.

Habits

Both routines and rituals can become habits. A ritual that becomes a habit loses its purpose since rituals are meant to be intentional and purposeful, requiring conscious, practised presence. Routines lead to habits more often. But habits also form based on past behaviours, responses, practices, and circumstances. It makes them the hardest to see, understand and change and skews your ability to evaluate how you invest your time and attention.

As a business grows from one level to the next, fundamental changes are needed to support the growth. How you lead, manage, and behave as a business owner in a company generating £5m annual revenues is fundamentally different to what is needed for a company generating threefold that. And to get a company from there to that future revenue requires different routines and habits to those that got you there in the first place.

So, can you change your habits to enable this growth?

Popular culture says yes. Identify the habit, understand the trigger, replace it with better behaviour, reward yourself each time and after 21 or 33 and ¾ days, a new habit is formed.

I don’t buy it. Many business owners backslide from leading growth into operating the business. What’s needed is more than willpower and six steps to success in habit formation.

By creating a monthly ritual that holds you accountable to your intentions and goals, using a trusted observer who asks the right questions, challenging and debating your answers, and using data and evidence to maintain clarity and truth, the likelihood that you will always practice the right habits for the right time is greatly enhanced. Consciously investing time and attention to growth, rather than having time and attention absorbed by old habits, is the key to unlocking your full potential in life and business.

Be wary of false prophets and white knights as you scale and grow your business

Elite Business: Be wary of false prophets and white knights as you scale and grow your business

In this article, first published in Elite Business, Pavlo Explores: Being wary of false prophets and white knights as you scale and grow your business

Exhausted, frustrated, driven business owners are vulnerable to false promises. We encounter various individuals claiming to have the solutions we seek, often leading us down costly paths. Let’s explore some of the most common pitfalls, look at how to avoid them, and design your business to scale and thrive.

Software salespeople

One group to watch out for is software salespeople. We all have strengths and weaknesses when it comes to managing our businesses. Software solutions, like Enterprise Resource Planning (ERP) systems, promise to address our management shortcomings. However, it is crucial to approach them with caution. Many providers offer comprehensive solutions, but purchase, customisation, and training costs can be significant. 

Before investing, we must map out our commercial system that marries and matches how you have positioned your company to provide an exceptional customer experience. That blueprint should guide your ERP decision, not the limitations and capabilities of the software itself.

Job seekers

Another common pitfall is hiring team members based on their charisma and passion. We are all vulnerable to slick promises that we can see could fill gaps in our capabilities or business activities when hiring new employees. 

To make informed decisions, precede your hire with a clearly defined job function. Beyond asking ChatGPT to spit one out for you, design it yourself, aligning it to your positioning. Any and every job should shape up into a system of activities, and all should integrate to create a single customer experience across and through your commercial system.

It enables you to recruit more effectively, capacitate faster and turn this significant investment into a return more deliberately.

Collaborators

Collaborations and deals with external parties can hold great promise but also carry risks. Many businesses have fallen victim to partnerships that did not deliver the expected results. 

Be clear why you are doing it. 

A recent study indicated that around 84% of mergers and acquisitions failed to yield the value that seemed to justify them in the first place. And when partnering with someone or an organisation, besides first assuring alignment and non-compete parameters, dig into the detail of who does what, why, when and how. Then, dig further before inking an agreement.

Acquirers

Selling a business is a significant milestone but often fails. Flattering statements and attractive numbers from potential acquirers may grab our attention. However, conducting thorough due diligence ensures buyers’ credibility and protects our years of hard work. It’s an obvious, bland statement, but do it! Arm yourself by mathematically understanding your business’s value and securing a body of evidence to back that up. To secure a clean exit, negotiation must be pragmatically informed, not emotively driven.

Family and friends

While well-intentioned, relying on family or friends to solve business challenges can lead to difficult situations. It becomes particularly challenging to part ways with underperforming relatives or friends. 

It is crucial to separate personal relationships from business decisions. By maintaining a clear delineation between personal and professional spheres, we can make strategic choices based on merit and the best interests of our businesses.

Building and growing a business takes time and effort. By being aware of your vulnerabilities and these common pitfalls, you can save valuable resources and maximise your chances of success. Trust your instincts and stay resilient on your path to business growth. With a proactive growth mindset and a systems-based approach to building out your business, you can build your business into your greatest wealth-generating asset.

ELITE BUSINESS MAGAZINE

Elite Business: Choose the right type of growth at the right time or face the perils of chaos

In this article, first published in Elite Business, Pavlo Phitidis digs into strategies to achieve accelerated growth – how to get it right (and avoid getting it wrong).

Recently, I had the opportunity to meet a business employing 58 people, growing at a steady 18% annual compound growth rate. Given the smooth ride they enjoyed in achieving it, I asked why only 18%? Why not double it?

They confessed that they sought to accelerate this growth rate through an acquisition they were mulling over. The target was a smaller business in the same industry. 

Whilst growth through acquisition has its place, it’s equally fraught. Globally, the stats suggest that around 86% of acquisitions fail to deliver the promised value. There are a host of reasons. I’ll share the few that changed their minds.

Paying too much

Once the acquiring leadership team gets excited about its potential, they will overvalue it. If the company being acquired can successfully feed the buyer’s imagination, they tend to become increasingly convinced that the acquisition will be a silver bullet that would double up their company value in a couple of years. Great for the company being acquired, but a few months into the acquisition, the buyers are usually less thrilled.

Mismatched customer base

Defining the business you are in should be about defining who your customer segments are, what problems your product or services solves for them, understanding how that problem comes about and the cost of that problem not being solved, and finally, understanding how that customer segment goes about solving that problem. It’s not uncomplicated! 

For example, the company I met with recently refers to their customer segment as “SMEs”. The last time I looked,  the companies that make up SMEs are widely, profoundly and deeply complex. Be it industry, size, age and capability of the owners, location, business model, sector trends and many other variables. A lazy or superficial definition of the customer segments you serve will create a torturous marketing and service fulfilment outcome that keeps you tightly knit in the daily-weekly-monthly operational activites of your business and collapse your productivity. Misaligned or misunderstood customer segments in acquisitions compound this trauma tenfold.

Cultural clashes

People are the heart of any business, and most stay at a company because of its culture. It is the glue that holds things together, especially in smaller businesses. How do you come to understand a company’s culture? If you rely on the values presented on the website or stencilled on the reception wall, you might find yourself in hot water. When two bodies of water with widely differing temperatures come together, they catalyse a thermocline, repelling each other. Mismatched cultures infamously poison the wellspring of most acquisitions.

Given the nature of this steadily growing business and its large span of control, which already had leadership too involved in operational activity, we opted to take another approach to double growth.

In 3 months, we created two management roles to release the time of the CEO to become an actual CEO rather than a general manager, the commercial director to become an actual commercial director instead of an operations manager and the head of business development to move out of operational sales into building a team. Today, we have ‘locked and loaded’ the company to eat their competitor’s lunch rather than buying it for them. Let doubling up growth begin!

Elite Business : If your business is not growing, it’s dying!

Elite Business: If your business is not growing, it’s dying!

In this article, first published in Elite Business, Pavlo Explores: Crafting a Strategic Growth Plan for Success in Today’s Economy.

Is your growth plan actually no plan at all? Or is it to sustain your value – neither is enough in this economy.

The Ukraine invasion, global supply chains, chip wars, trade ‘wars’, COVID hangovers, access to skills and grumpiness have heavily impacted our economy. Add inflation to a grumpy mood, and you, not the state of the economy, will kill your business if you allow it.

Let’s prevent that!

Plan to plan, but no plan yet.

If you are stuck here, you will develop an irreversible aversion to risk and a mindset that only sees risk and reasons not to act. A year back, I met the owner of a second-generation family business in the construction sector. He enjoyed a reliable £13m annual revenue, up and down a few percent for the decade preceding covid. Since then he has wanted to regain his revenues and dividend flows. Still, it remains talk, unable to commit to building a growth plan. Perhaps a decade of comfort atrophied the muscles needed to act amid his competitors enjoying record growth over the last 3 years. 

Should this be you, sell your business before its value erodes further or act now. Here are two options.

Act to sustain your value.

In February, I met the owners of a once beautiful £21m revenue business. In response to the strain of their overheads bearing down on them, both partners dove back into operational sales. Spinning rolodexes, bouncing between their digital platforms, CRM and debtors book helped find, win and hold customers. It’s an exhausting and chaotic strategy, and they are reclaiming their £21m. 

It’s not sustainable, and it’s not enough. 

To maintain their 2019 value, they need growth to meet the corrosive elements of business value. They include:

Inflation – at 10,1% in March, robust inflation is likely to overstay its unwelcome visit. As business owners, we should look to open our upside and protect the downside so let’s expect the promised 2% target to arrive only three years from now. 

Currency – our currency’s value is driven by relative inflation and belief. Technically, the gap between our inflation rate and that of our peers drives the relative depreciation of our currency. This gap runs around 4% at the moment. It is then either depreciated or compounded by the belief and trust in Britain’s ability to grow and attract investment. 

Industry Growth Rate – Industry growth rates are, at best relative and as speculative as any revenue forecast a business owner presents to investors. Many factors weigh in on this number. For the benefit of a simple calculation, let’s assume that your industry is expected to grow at 2%.

Adding up the numbers, to maintain the value of their company, they need to grow their £21m by 16,1%.

After running these numbers, the mad flurry of activity undertaken by the founders paused. They boldly and purposefully replaced it with the following plan.

Plan to scale, grow and dominate segments in your industry

While 16.1% feels like a considerable number, scaling, growing, and dominating a few segments in your industry needs more. At least add another 3-5% to boldly set your year-on-year growth at a minimum of 20-23%.

A tough economy rewards companies that respond on the front foot ahead of the changed lived reality that their customers and clients face. 

Start by revisiting which customer segments you wish to dominate and reset your product-market fit to meet the new experiences demanded by these customers. Next, articulate these experiences into your commercial activities, processes and systems. Done with your team, not alone, helps create accountability and enables effective delegation. 

The result will be a simple, relevant, crisp strategy defined against a well-defined market segment. It will be a commercial system honed to service that market, empowered and led by a purposeful team. It will generate organic growth and resuscitate the value and dividend stream you once enjoyed. Valuably, it will release your time to lead the 20-30% that this economy offers.

Yup, I know, I said 20%. However, done this way, 30% year-on-year growth is likely, so why not!

business leader

Business Leader: Inspiration from an onion – Reset and rebuild your business model to reignite growth

In this article, first published in Business Leader, Pavlo shares a simple tool – the onion – to think about your business, and identify your strategic focus.

Our inflationary, high-interest rate and low-growth economy will see companies with high overheads struggle to maintain the performance demanded by shareholders and executive bonus calculations.

As inflation and interest rates shrink local market value, access to established and new markets offer growth alternatives. Additionally, resetting and rebuilding a business model to increase productivity and performance will become a strategic imperative.

Market access

Expect mounting challenges accessing foreign markets. Brexit increased expenses and obstacles to trade with our closest £300 billion market. The array of ratified trade agreements might offer alternatives, such as the recently trumpeted CPTPP trade agreement which is worth a theoretical £37bn. Our challenges will be many. Our strengthening currency, significant differences in labour costs, and rapidly closing gaps in digitisation and technology competitiveness all weigh in. For products, add the cost of inputs and transport, set to increase further as we comply with our laudable commitments to Net Zero and other climate-friendly policies and regulations. All add to the cost of doing business, making our products less affordable than alternatives. For instance, imagine the cost of competing with a chocolate manufacturer in Chile or Malaysia, where our labour and transport costs are higher, before factoring in compliance with legislation and policy.

To overcome these challenges, we must increase productivity significantly. And since 2008, we have struggled to get this right! It can and will be done by those leaders intent on preserving their company value and remaining steadfast in growth despite all our economic ailments.

One way to get this right is to take a lesson from the simplest of vegetables: the onion.

Reset and rebuild your business model to reignite growth

An onion has three layers – the sweet inner; tangy middle; and outer protective skin. Applying this metaphor to your company offers up many opportunities.

Your inner layer is about understanding what is core and strategic to your survival, growth, and domination. You must own, deepen and protect these elements. Your middle layer includes everything non-core but strategic to the business. Outsource these elements to reliable partners on medium-term contracts. Your outer layer comprises everything non-core and non-strategic, where products or services are commoditised, and price wins the deal.

We recently used the onion to reset and rebuild a business intelligence company we work with. At its inner core, it must excel in analytics, interpretation, design, and presentation. It must own its software and skills in analysis and presentation. Its middle layer requires hardware, connectivity, and brand and marketing service providers. They are strategic but non-core to success. We established medium-term partnerships with providers whose services are their core strategic foci and intent. Their outer layer includes stationery, accommodation, refreshments, and other non-core, non-strategic products and services.

Today, they enjoy several benefits. A honed, simplified understanding of what matters most to grow and dominate their industry increased their productivity and market responsiveness. It has also allowed leadership to spend almost 70% of their time leading growth instead of managing operations. The company’s newfound growth has come increasingly from big and corporate clients. Out of necessity, these corporates have had to equally tighten their foci and shed costs by outsourcing previously insourced services such as business intelligence.

As business leaders, our company growth will increasingly come from excelling at how we position, win and lock in our services as middle-layer onion specialists.

2 halves of a business

Elite Business: Two halves make the whole business

In this article, first published in Elite Business, Pavlo explores why a brilliant product or service is not enough to build a brilliant business.

What you do is not enough; how you do it matters more. You have talent, are skilled in your vocation and have built competitive products, but customer acquisition is a grind and even stalling – Why?

Recently, a vociferous and highly talented founding team convinced me (and themselves) that they had built a globally competitive product. Yet, sales were stalling, and the grind needed to land a new client was bleeding their and their team’s passion dry. As exhausted as they were, so was I until the penny dropped: A great product does not build a great business.

Sometime during the late 19th century, a moment of inspiration came to Ralph Waldo Emerson, the American founding father, essayist, and poet. After witnessing a mouse escape a botched mousetrap, he wrote,”Build a better mousetrap, and the world will beat a path to your door”. In the late 19th century, he was probably right. There were relatively few products, and of those in the market, quality varied magnificently.

Emerson’s ghost visited me recently. It was the central thought in my brain as I listened to one of the founders give his take on why their product was exceptional, innovative, and globally competitive. Another founder shared her take on the market problem as one of education. “How do you convince customers of the value of our product when they don’t even know about us or understand how brilliant our product is?” she bemoaned.

It’s a common problem that many company owners contend with. Understanding why and how this problem occurs is essential to scale, grow and dominate niches within your industry. It’s vital to distinguish your brand and build your business into an asset that you can monetise through a premium exit in the future. And a great, world-class product is not enough to get this job done.

Every business has two fundamental parts to it. Both must be optimised, linked and integrated to create the complete experience any winning business offers. One without the other will fail your efforts repeatedly and eventually drain the passion and optimism that feed the drive and commitment that growth demands.

The first part is your product or service suite. And Emerson’s quip remains constant here. Every industry is overcrowded, and out of necessity, most of your competitors have built solid products and services. Trying to attain a product advantage by creating more features for your product or service won’t last or get you into a market on a sustainable basis. The primary job of your product is to solve a problem. A drill that cannot drill a hole will not build a world-class business! 

Solving a problem needs tighter definitions in competitive markets. It requires a solid understanding of whose problem you are solving. For example, a drill used by an urban, single professional for hanging the odd picture needs a different proposition to a drill that aims to solve the problem encountered by a professional handyman.

This brings us to the business’s second half, which is essential to scale, grow and dominate. The product or service that solves a well-defined problem for a well-defined market segment must couple with a commercial system led by a motivated team to create relevant, well-defined customer experiences.

The question is, what creates a great experience? This, too, will differ depending on who you serve. Back to the drill. How a young, urban professional wants to learn about a drill, understand its capability, match that to the problem they want the drill to solve differs dramatically from the professional handyman. Additionally, how the engagement, buying, fulfilment and administration process works to deliver the product would differ between the two customers to create a complete and ideal experience.

Curating this experience requires a deep understanding of which customer segment you want to own. Then, narrow it further to understand precisely what experience they want to select your service above the many contenders. This creates the blueprint for your second half. It guides how you design, optimise and integrate your commercial functions into a repeatable, predictable experience. It is the key to accelerating your products and services to that market. This half of the whole business is arguably the hardest to build and the essence of a scalable service platform. Without it, scaling, growing and dominating a segment or three in any industry is a dream.

I recently reached out to Emerson’s spirit to update his coined phrase. “When everyone has a good mousetrap, you’d better beat the path to your customer’s door”. I’ll let you know his decision as soon as he responds. Meanwhile, the founders and their 48-strong team took it to heart. While it has taken some time, they are on a 17.6% annual revenue growth run rate, which seems unlikely to slow anytime soon!

Business Leader: Adopt a growth mindset to grow your company in an inflationary economy!

In this article, first published in Business Leader, Pavlo looks to the white ant or termite to make a point about how inflation eats away at your business’s value.

The white ant, otherwise known as a termite, it’s a formidable little creature with an impressive set of jaws. They eat wood at a voracious rate and do so through the inside, not on top. Spotting them at work is only discovered when your foot lands on a floorboard and crashes through. It earned the term “white-anting”, analogous to how unforeseen forces unravel and disassemble efforts to create, build and sustain whatever it is you are doing.

White-anting aptly describes the corrosive impact of inflation on a business. Having last seen sustained inflation levels, in tandem with their ugly partner, rising interest rates, over 44 years ago, most of us would be far too young to remember the antidotes and counter strategies we can deploy across our business to sustain and, in fact, grow during such periods.

In this series titled ‘The inflation white ant‘, I’ll share six practical strategies to counter the corrosive effects of inflation on our companies and our state of mental well-being. I’ll draw the insights from companies I work with and share practical strategies and tactics to counter the value destruction inflation brings and the growth opportunities it opens.

Approaching inflation with a growth mindset is imperative

It anchors you in the reality of the economy rather than a wait-and-see hopeful one. It also lets you see, feel and understand the changes inflation ushers into the economy, allowing for inspired and bold action.

The shock of our stubbornly high current inflation rate and the ongoing litany of dire economic news feeds uncertainty in decisions and actions. Yet, he who hesitates is lost, and the decision, no, the discipline of maintaining a growth mindset, yields inspired positive actions. It’s the difference between leading or following and stepping boldly into this economy on the front foot with the advantages that it brings.

Inflation erodes what you have at a compounded level. Hesitating to invest in growth today means the same investment will be more expensive tomorrow. Add to that the opportunity cost of hesitation or indecision.

I recently met a business owner considering investing in a new lathe. We ran the numbers, and the acquisition would collectively increase productivity by almost 7%. That increase lent itself to more competitive pricing, improved quality, and the opportunity to outbid competitors and grow market share. At that time, the media was filled with dire forecasts of Russia’s invasion of Ukraine, further driving energy and food costs. Doomsday Sayers weighed in heavily, accurately forecasting the inflationary prices we’d all have to bear. Hesitating, this business owner opted to wait for a more certain economic forecast.

March forward eight months, interest rates rose, and any possible debt funding dried up. The lathe’s price, including transport and commissioning, has increased by 15,8%.

The same month, a client in a similar industry took a different approach

They opted to invest in a new fleet of delivery trucks. The numbers showed us that the new fleet would increase productivity by an estimated 6% due to increased fuel efficiency, amongst other gains. It would also improve the company’s “green rating”, opening doors to EU-based clients that required such accreditations before accepting them as a new vendors. Nine months on, productivity improved by 4%, and they landed five new clients.

The differences between these two business owners are stark and lie in their mindsets. Both business owners live and breathe in the same economy. The growth mindset saw the future economy as an opportunity to act and grow in the face of the rising costs customers would face by getting ahead to improve productivity. As costs rose, he maintained pricing off the back of his reduced cost base. It earned him new clients, many at the cost of his competitors, that had to raise pricing. Literally ‘across the road’, the hesitation of the passive mindset lost the productivity gains that the investment would have ushered in time to meet the demand for improved pricing from customers under pressure.

A growth mindset is half what you need to thrive in an inflationary economy. The other half is a growth plan designed to capitalise on it.