Any business owner has to lead…but what are you leading?
This Week@Work, if relationships build and grow a business, but you’re not the one who holds those relationships – you’ve got to start building your own.
Tag: Growth&Scale
Build the relationships that build your business
This Week@Work, if relationships build and grow a business, but you’re not the one who holds those relationships – you’ve got to start building your own.
Elite Business: Remote work is for the birds
In this article, first published in Elite Business, Pavlo puts a question mark on remote working.
Businesses are about people. And people are about skills, thinking and action. If your people are less than that, you should be looking at technology to do that person’s job. It’s more reliable, dependable and far easier to manage. But it won’t create magic, innovation or culture across your business. People will and do. Remote working puts a question mark on that.
Here are some reasons why.
Troubleshooting
When a problem arises, the ability to immediately resolve it by pulling people into a room before it cannot be done remotely. And if the problem and its solution need a multidisciplinary approach, which most problems do, then the right people in the room can step out after and all do what needs doing to get the job done.
As your business grows, it is even more critical because the people in the room might have to coordinate and organise their teams to get the job done. It’s instant, and when it comes to retaining clients and building a brand (problem resolution builds a brand better than any marketing campaign), you need to get it done there and then.
Culture and value
Culture is nebulous, yet without one, your business creates a staccato experience for suppliers, customers, and employees. Values create the nous that enables your business and its employees to operate against an intuitive framework when needed. This intuition or unconscious response develops over time. It doesn’t build from the values stated in your website or reception wall but through living, breathing and observing the behaviour of all business employees, especially its leaders.
If values create the framework and culture of the behaviour about what a company stands for, the best way to learn it is in person. Imagine a scenario where an employee enters the office of a manager. The door closes. A few minutes later, the employee leaves the office, pale and slightly stressed. Your colleague sitting next to you asks what went down. You explain what that employee did, and through that, you learn the authentic culture and values of that company. A word indicating a value, be it integrity, honesty, etc. means very little until it is understood and witnessed in practice.
Learning and training
While aspects of employee training are best offered online and therefore accessible remotely, the context, the application and the improvement of an employee’s performance arguably cannot be. We learn by doing not online engagements and content. Observation and “show and tell” are far more impactful ways of developing capability in your employees. Imagine trying to learn kung fu remotely rather than in the ring. Only when a punch lands do you genuinely understand how to take the theory and put it into a useful practice suited to your inherent abilities. The same goes for riding a bicycle, managing a project, managing a team, collecting a debtor book or selling.
Growth
Beyond a job, why do people opt to work in your business? I’ll put it into context in a recent meeting with a global law firm specialising in tax. Their brand exciting and innovative brand operates across a federation of autonomous companies operating in 169 countries. In the past, they won recruits with their innovative approach to tax, assured learning and very quick exposure to exciting clients. Their vibrancy won them talent before bigger firms’ cold, hard salary packages. But, they have found that remote working has directly prevented the handover of relationships from senior partners to junior partners and associates. It has harmed the transfer of knowledge on the subject matter, the personalities making up a client, the industry, and it has stunted the ability of senior partners to pick junior partners effectively and for junior partners in return to compete to work with promising associates.
Remote working is a privilege, not a right. If you are attracting employees who demand it, consider moving on. They are there for their comfort rather than the well-being of the business as active, engaged, committed contributors who go beyond fulfilling a functional role.
When is there a case for remote work? It should be part of your business-building toolkit. How to use it, when and where and then how to manage it is a future article.
Elite Business: Crack the skills crisis
In this article, originally featured in Elite Business, Pavlo explores the topic of the UK’s GBP6.6 billion skills gap, exacerbated by inflation and tech advances, demanding attention. To succeed, prioritise growth and talent. Build a resilient business model and hire system operators to navigate the skills crisis and pursue higher growth.
Skills are short globally. In the UK, the skills gap cost businesses an estimated GBP6.6 billion. The subsequent challenges of inflation, war in Europe, and the accelerated adoption of AI and other technologies can only have increased this.
This shortage of skills is not a problem if you don’t want to grow. There are two parts to this comment.
First, growth
If you’re not growing, you’re dying because your competitors intend to, and in a low-growth environment, their growth will come from eating your lunch. Add inflation, and you are eroding the value you have built thus far. If you opt not to grow, look to exit and realise your value before it whittles away.
If you want to grow, there are two options. First, grow to maintain what you have. This pegs your annual growth rate at inflation, the tepid country growth rate, and your industry growth rate. It approximates 8% per annum. At this level, you are maintaining what you have. To grow beyond what you have, your growth rate should add another 5-10%, depending on your ambition.
Next, talent
In the instance of growth, you need a plan, and that plan needs two things. First, and most importantly, your time and attention to focus on growth. Next, a business model and team that allows your time and attention to focus on growth. Both mean you need to have a good team on board of the right people doing the right thing at the right time.
Across businesses I visit the following constraints regarding human talent become apparent.
- I need help finding the right people.
- I have people in senior roles who don’t have the skills or mindset to get the job done without my regular support and guidance.
- It takes ages for new employees to get up to speed and wash their faces.
- My “rock-star” employee is constantly toying with other opportunities.
The employment challenge is here to stay. Demographically, each year sees fewer people entering the workforce. Over 2.8m working people are sick, waiting for operations. About 500 000 able, capable 50 years and older, experienced people opted for early retirement.
If structure determines behaviour, build your business to accommodate the skills challenge.
A business does not just emerge. It is built against an operating model. Your operating model must sympathise with the challenges of growth, size, and shifts in the economy.
However, the bones of the operating model that will resolve many of your human capital challenges remain the same.
It begins with defining your business in terms of the customer segments you serve rather than the features and criteria of your products and services.
Understanding these segments, what problem you solve for them, and what experience they want in the process forms the blueprint of your operating model.
Using the blueprint, build the operating processes and systems to deliver that outcome reliably. Systems are sequential activities that bring the experience of the blueprint to life, and that can be taught and measured. Do this across all your commercial functions that comprise that customer experience blueprint. In each function, these activities make up a job description.
You can now hire people, not because they bring some of their superstar ability to the role, but because they can be evaluated and trained against the activities in their employed function.
Hiring system operators, rather than mavericks and gurus, has several 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 a purpose as they know what to do and when to do it, to achieve a specific outcome. Their performance can be 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.
This unlocks your time to focus on next-level growth despite the skills crisis.
Invest boldly in your business today, to get ahead of the competition tomorrow.
This Week@Work, when the business environment is uncertain or challenging, it’s easy to delay investment in your business, while you ‘wait and see` what will happen with the country, economy, etc.
But growth requires investment, you have to be bold to be the last man standing on the other side.
This Week@Work: To reach your business destination, answer two questions.
This Week@Work ask and answer just two questions to build the resilience and clarity you need to get on a track that will help build your business into your greatest wealth-generating asset.
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.
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.
This Week@Work: Defy the skills shortage with a fresh approach to recruitment and your team.
This Week@Work the skills shortage has been touted as a skills crisis. How do you get the right people to do the right thing at the right time, all the time? The solution lies deep within your business – understanding clearly what problem you solve, for whom and then codifying the activities that deliver the solution and experience are the key to building a purposeful team.
This Week@Work: Commercial business systems enable scale if built right
Setting your business apart in a crowded market is vital if you want to grow. Building your commercial systems to enable it, even more so. Sourcing the blueprint for how your business systems will be built, is the key that unlocks your scale and growth, or a chaotic nightmare.