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

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

Written by Lindokuhle Ntombela on . Posted in Insights, Leadership, Scale & Grow.

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.

business leader

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

Written by pippa@aurik.com on . Posted in Insights, Leadership, Scale & Grow.

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

Written by pippa@aurik.com on . Posted in Insights, Leadership, Operational systems, Positioning, Scale & Grow, Team.

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!

Written by pippa@aurik.com on . Posted in Insights, Leadership, Mindset, Scale & Grow.

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.