This Week@Work there are two things that will determine the future of your business.
1. Attitude – the way we see the world determines whether we see opportunities or risk, whether we embrace change or hide from it.
2. Our actions, specifically our unconscious ones, the habits that have helped us to start, build and grow our companies, may be the same habits that are now holding us back from next level growth
This Week@Work Pavlo is more disillusioned than ever with digital marketing. It’s increasingly a game where you pay to play, and the only ones who seem to win are those with the deepest pockets, and the platforms themselves. What alternatives do we have to woo customers? Could the answer lie in getting to know them better?
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.
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:
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.
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.
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.
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.
This Week@Work, purpose is paramount. Pavlo visited a successful tea company who now proudly display their original tea sorter (a DIY modified cement mixer!) in their reception area to remind the business about their heritage. In tough times, go back to what you’ve been through and come through to motivate you to get through now, and focus on what needs to come next.
Once your business has achieved a ceiling of performance, your time and attention determine your future success. Habits formed whilst building your company will fail its future growth and value.
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.
This Week@Work, purpose is paramount. I visited a successful tea company who now proudly display their original tea sorter (a DIY modified cement mixer!) in their reception area to remind the business about their heritage. In tough times, go back to what you’ve been through and come through to motivate you to get through now, and focus on what needs to come next.
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!
Discover the key drivers behind a vibrant economy as discussed on a recent Money Show insert with Pavlo Phitidis and Bruce Whitfield. This highlighted the crucial factors of competition, innovation, funding, and talent and their role in shaping economic landscapes. Here we delve into the main takeaways from the show, exploring how individuals and businesses can contribute to building a thriving economy.
Competition Drives Progress: Competition is the driving force behind growth and progress in any economy. When businesses compete, they are motivated to constantly improve their products and services. This healthy competition fosters innovation and encourages companies to develop groundbreaking ideas and solutions that address market needs.
Innovation and Funding for Success: Innovation is the lifeblood of success in today’s fast-paced business world. It requires adequate funding to thrive. Access to capital is essential for businesses of all sizes as it enables them to invest in research and development, upgrade infrastructure, and expand their operations. Adequate funding also plays a vital role in attracting and retaining top talent.
Talent as the Engine of Success: Talent is a critical driver of success for any enterprise. Skilled individuals with expertise and creativity propel businesses forward. Whether large corporations or small startups, attracting and retaining top talent is crucial for driving innovation and achieving sustainable growth. Nurturing talent within an economy is vital for long-term prosperity.
Roles of Different-Sized Businesses:
Understanding the roles played by businesses of different sizes is key to fostering economic vibrancy.
To listen to the full discussion from the show:
In this article, first published in Elite Business, Pavlo Explores: Crafting a Strategic Growth Plan for Success in Today’s 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!