Grow & Exit

In the world of small businesses, defining and achieving industry leadership can be a complex but rewarding goal. This article discusses what it truly means to be a leader in your industry and outlines practical steps to move from a vague vision statement to a measurable and achievable business objective.

What Does It Mean to Be a Leading Business?

Many companies state in their vision or mission that they aim to be the leading business in their industry. However, when pressed to explain what “leading” actually means, business owners often struggle to provide a clear definition. Without a precise and measurable definition of leadership, this goal can become an empty claim.

The Importance of Clarity

To become a true industry leader, a business must first define what leadership means in its specific context. Is it about market share? If so, who constitutes the market? For example, if you are in the business of manufacturing luxury furniture, you need to break down what “luxury furniture” includes. Is it dining room tables, sofas, chairs, or lounges? Understanding your market and product specifics is crucial.

Setting Realistic and Measurable Goals

Let’s say your focus is on luxury dining room tables. The first step is to determine how many such tables are bought annually in your target market. If you identify that 500,000 dining room tables are sold each year in your defined geographic region, you then need to ascertain how many of these qualify as high-quality luxury items. Suppose 5,000 of these meet the high-quality standard. This gives you a tangible target to aim for.

Understanding Market Share

To claim industry leadership, you must know your competitors and their market shares. If you have ten competitors and the market is evenly split, each would sell about 500 tables annually. If your goal is to be the leading supplier, you need to sell more than 500 tables per year. By consistently increasing your sales figures—say from 500 to 600 to 1,000 to 1,500—you can objectively measure your progress towards market leadership.

Enhancing Business Operations

Achieving and maintaining a leading position requires continuous improvement in various aspects of your business. This includes enhancing the quality, price, service, delivery, durability, and brand reputation of your products. By systematically improving these areas, you can increase your market share and solidify your status as an industry leader.

Claiming to be the leading business in your industry is more than just a statement—it requires a clear, measurable, and achievable plan. By defining what leadership means in your specific context, understanding your market, setting realistic goals, and continually improving your business operations, you can move towards becoming a true leader in your industry.

In the landscape of mid-tier businesses, vision serves as a cornerstone for sustainable growth and prosperity. But what exactly does it mean to have a vision for your business? How does it evolve over time, and why is it crucial for long-term success? These questions often resonate deeply with mid-tier business owners seeking to navigate the complexities of today’s competitive market.

The Essence of Vision

For mid-tier businesses, a clear vision is not just a luxury but a necessity—a guiding star that illuminates the path forward amidst uncertainty. As Pavlo observes, “If your business doesn’t have a vision, then where on earth do you think it can possibly go?” Indeed, a vision serves as a compass, providing direction and purpose to every endeavour undertaken by a business.

However, the concept of vision extends beyond mere aspirations or dreams. It embodies a deeper understanding of the problems a business seeks to solve and the impact it aspires to make in the world. As businesses evolve, so too must their vision, adapting to changing landscapes while remaining rooted in their core purpose.

Navigating the Evolution of Vision

In the early stages of a business, survival instincts often drive decision-making. The relentless pursuit of growth and stability propels entrepreneurs forward, fuelling their drive and determination. Yet, as businesses mature and ascend to the mid-tier realm, a fundamental shift occurs. No longer content with mere survival, business owners begin to envision a future defined by purpose and impact.

Crafting a Purpose-Driven Vision

The true essence of a compelling vision lies in its ability to inspire action and unite stakeholders under a common cause. Beyond profitability, it encompasses the profound impact a business strives to achieve—the problems it solves, the lives it touches, and the legacy it leaves behind.

A vision must be dynamic, capable of evolving with the ever-changing landscape of business and society. While the means may vary, the core purpose remains constant, driving innovation and adaptation in pursuit of a shared goal.

The Role of Leadership in Visionary Growth

Central to the cultivation of a powerful vision is effective leadership—a guiding force that steers the course of the business towards its destined future. Leaders within mid-tier businesses must not only articulate the vision but embody it, serving as beacons of inspiration for their teams.

In cases where leadership falters or stagnates, the entire organization feels the repercussions. A lack of vision breeds complacency, stifling innovation and impeding progress. It is incumbent upon leaders to continuously reevaluate and realign their vision, fostering a culture of growth and resilience.

Embracing the Journey of Visionary Leadership

Vision serves as the catalyst for transformative change and sustainable growth. From humble beginnings to soaring heights, it guides businesses through the complexities of today’s market, anchoring them in purpose and possibility.

As mid-tier business owners navigate the ever-evolving landscape of commerce, let them heed the wisdom of visionaries past and present. Let them dare to dream boldly, to envision a future where their businesses not only thrive but leave an indelible mark on the world.

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.

In the world of business, growth isn’t always a straightforward path. Many business owners, regardless of their experience, encounter three common growth challenges that can leave them feeling frustrated and exhausted. Let’s delve into these challenges and explore strategies for overcoming them.

1. Stagnation: When Growth Hits a Wall

Stagnation in business is like running on a treadmill—you’re expending energy, but you’re not getting anywhere. Business owners often attribute this to external factors, like market conditions or economic fluctuations. However, it’s crucial to recognize that stagnant growth often reflects an inward-looking, passive approach.

The solution? Start by re-evaluating your business mindset. Instead of dwelling on external factors, shift your focus to what you can control. Embrace change, be proactive, and actively seek out growth opportunities. Blaming external factors won’t drive progress, but a change in attitude and approach can.

2. Stuck Growth: Spinning Your Wheels

Stuck growth is akin to trying to move a car out of the mud—you’re putting in effort, but the wheels keep spinning. In this scenario, your business might be making deliberate efforts to expand, but the outcomes remain disappointing.

To break free from this situation, it’s necessary to reconsider your approach and actions. Understand that what worked in the past may no longer be effective in the current business landscape. Re-evaluate your strategies, investments, and operations. Seek expert guidance if required. Don’t persist with the same methods if they’re not yielding results.

3. Chaotic Growth: Thriving Amid Turbulence

Chaotic growth can be both exhilarating and overwhelming. Your business is expanding, but it feels like you’re constantly putting out fires. Daily operations become increasingly complex, and you’re pulled in every direction.

To regain control during chaotic growth, focus on establishing a robust foundation. Reorganize your business structure and operational processes. Simplify workflows, delegate responsibilities, and introduce systems that can handle growth efficiently. Building a structured foundation will prevent you from getting bogged down by the daily whirlwind.

Regardless of the growth challenge you’re facing, it all begins with a shift in attitude and approach. Recognize that your business and the business environment are in a constant state of evolution. What worked in the past might not be effective today. Embrace change, take control of your business’s destiny, and adapt to the evolving landscape.

In the words of Thomas Edison, “Opportunity is missed by most people because it is dressed in overalls and looks like work.” Don’t let these challenges deter you; instead, view them as opportunities to evolve and thrive in the ever-changing business world. Unlock your business’s growth potential by adopting the right mindset and strategies.

To listen to the full discussion from the show:

In the ever-changing landscape of business, where startups can skyrocket or vanish overnight, the journey from small business owner to industry veteran is nothing short of remarkable. What should you do when you’ve built a successful business over two, three, or four decades? Should you retire, or should you continue running the show until the end?

The Essence of a Business

A fundamental principle in business is that it should be designed to operate independently. Your business is a living entity, much like a well-functioning organism. So, what should you consider when you find yourself in your 60s or 70s after dedicating a lifetime to your business? Is retirement the next logical step?

Legacy and Purpose

Contrary to common perception, entrepreneurs don’t typically retire solely for financial gain or out of sheer greed. The decision to retire often arises from exhaustion, health concerns, family matters, or a sense of stagnation. These factors raise a fundamental question: What drives business owners to continue or to step away from their enterprises?

Creating Meaning

I believe there are  deeper motivations that underpin the decisions of business owners. The journey of entrepreneurship begins with an audacious act of courage, often driven by necessity. It involves doing things differently, leveraging your skills and knowledge, and creating something unique that leaves an indelible mark on the world. This is the genesis of meaning in one’s entrepreneurial voyage.

Furthermore, business owners must care deeply about their employees, suppliers, and customers. Being in service to others while nurturing creativity adds profound meaning to one’s life. The fusion of creativity and service forms the very essence of an entrepreneur’s existence.

The Challenge of Letting Go

When a business is well-established and capable of operating autonomously, the thought of retirement may cross your mind. But what comes next? This is a question that every aspiring retiree must confront. The routines, habits, and rituals that have defined your daily life suddenly vanish. Where can you find purpose in the post-retirement phase?

Creating a Vision for Progress

One way to ensure a fulfilling transition is by envisioning your role within the industry. Consider the story of an 84-year-old business owner who, due to a lack of innovation and systematization, couldn’t let go of his business. Had he exited at the zenith of his business’s success and reinvested in nurturing emerging businesses within the industry, he would have continued to make a meaningful impact and maintain a sense of purpose.

The journey of a business owner doesn’t have to conclude with retirement. It can transform into a purposeful existence that fuels innovation and contributes to the industry’s growth. These insights remind us that entrepreneurship isn’t just about creating wealth; it’s about crafting lasting legacies that endure beyond one’s lifetime. So, whether you choose to retire or remain at the helm, your decision should align with your vision for a meaningful and impactful journey in the world of business.

To listen to the full discussion from the show:

If you reflect on what you have built so far. A simple business, focused on solving problems for a few well-defined customer segments and retaining them by creating a great experience delivered reliably and consistently. You have a few growth strategies maturing all the time, and they are all now led and run by your team. You have time on your hands. Apply it to focusing on deepening and locking in your value.

The starting point here is to understand the basic premise of value investing. If you are investing in a share on a stock exchange, you want three outcomes:

1. Income – your annual dividends. 
2. Capital – you want the capital value of the share to grow over time so you can sell it for more than you bought it.
3. Tradability – you want to be able to sell and buy the share as you like

Value is all about behaving as a shareholder or investor in your own business. Looking at your business like you look at a share is how you lock the value into your business.

In this Podcast of the Money Show Pavlo Phitidis unpacks the final layer in building a 100million valuation company: [VALUE]

The fourth layer is all about growth.

With your time now split to only 30% on operational and management activities because of the first 3 layers, you have time to focus and lead growth. There are several different types of growth you must generate to both lift revenues and deepen profit, and one without the other is of little value.

Growing revenue is about increasing your company’s revenue, while growing profit is about increasing your company’s profitability as a percentage of your revenue. In effect, you want to increase the “gap” between your revenue and your costs to increase profitability while also increasing the quantum of revenue to increase profit.

The first three layers see you with a company that serves well-defined customer segments whose ideal customer experience you’ve determined in the Positioning layer, which is then built out in the System of Delivery layer and brought to life in the Purposeful People layer.

Locking in capital

Achieving this needs you to lock in the growth and future profits of your business. Depending on what business you are in, this can be achieved across multiple areas.

1. Brand – A brand is a feeling that your stakeholders have towards hearing your company name. What you do for who, how you do it and why you do it carry all the building blocks of a brand beyond pretty logos and business cards. It’s hard to get right and costly too if you cannot answer these questions with a vision for yourself and your business. A brand is lived before it is felt and it must transcend your business into the industry and sectors you work in.
2. Suppliers – any dependencies on suppliers must be locked in, contractually or otherwise. If you represent a brand in your territory, that contract must ensure longevity and cession. If you run a restaurant, you must have a long-term tenancy, etc.
3. Customers—to what degree can you provide a service (and every business is a service business) over the long term for your customers? If you can move towards providing a service over time as opposed to a single project, that secures long-term customers. There are many ways to get this right. Think of a motor plan as an example.
4. Team—how do you lock in your team as the drivers of your business.

Across all these areas, you need to ensure that you, your role, and your presence are minimised.

Ensuring tradability

Understanding the 5 levers of valuation and exit is key for any business owner. Not knowing them means you may well build a business that does well for you over 10–20–40 years but cannot be sold or transferred when you want to exit. You’ll have earned a good income, but the capital gain will be lost, robbing you of monetising the years of investment and risk it took to get here.

Let’s end off by behaving as the buyer of your business. The promise was to create a business worth 100 million.

20 years in, you should be owning a material portion of your market. This could be as much as 2-3% in the service industry. In manufacturing, this should be around 3-5%. It varies from industry to industry, but you need to have a view on it, and you need to be in a position where you are generating at least 10-12 million in profit. After 20 years, this should be possible… right?

Valuation works as a multiple of profit. In general, multiples start at around 2-3 and move up to 5-6.

So, let’s make a deal. The 5 levers are a set of questions that cover the following areas:

1. What distinguishes you in the eyes of your customers?
2. How is the business operated and run?
3. Who makes it all happen?
4. Is there future growth?
5. What happens without you there?

An Asset of Value™ is a business that answers them all. Each layer plays into the next as they couple together and demonstrate that each of these question sets can be addressed in a manner that earns an additional 5 multiples on the running industry multiple.

On a 10 million profit, a 5 multiple earns an additional 5 multiples to give you your 100 million asset.

Jack was 54 years old when he came to Aurik, he had 76 employees at the time and his revenue was $4,89 million per annum.

He was also exhausted.

Jack ran multiple, disconnected businesses. one supplied baked goods to hotel chains, another was a retail coffee shop, he also had a few bakeries which he ran, and he bulk broke flour to distribute to smaller bakers around him. The business was extremely chaotic, and Jack wanted to sell it, but who would buy his problems?

Working with Aurik, Jack identified 1 business and closed the rest, together we developed Systems of Delivery, empowered by a team, to dominate that chosen sector.

The System of delivery released his time to focus on new market segments and innovation to enable next-level growth.

Jack’s  annual revenues increased 10-fold and his business was valued at $77,2 million after working with Aurik.

 In addition, Jack no longer wanted to sell as he business was fun and exciting again –

Watch this video summary of Jack’s story

During WWII, the British government used a series of slogans to manage the public mindset, the most enduring of which is “Keep Calm and Carry On.” It lives on in memes, coasters, fridge magnets, t-shirts, bumper stickers, and mugs. It was a slogan used to manage fear and an attempt to maintain a mindset of EGBOK (everything will be okay) amid deep uncertainty.

Uncertainty is back, and the world of NICE (no inflation, constant expansion) enjoyed over the last decade in many economies has ended.

Rising inflation and interest rates; an unstable currency; the seemingly unstoppable march of energy costs; and the almost certain probability that the unemployment rate will begin to rise all contribute to an alarming increase in the cost of living. Exacerbating and feeding more uncertainty are the impacts being felt by climate change, global conflict, and trade barriers while still trying to recover from the COVID supply chain disruptions, the isolation of remote work, online fatigue, and eyewatering levels of national debt. These and a litany of other local and regional grumblings can collectively disassemble any sane, rational person.

Exasperated, we turn to our politicians and leaders, demanding that they “fix” everything. They did promise a better life for everyone! Well, we all know how that has worked out. When there are no cogent answers to complicated problems, slogans become the mantra governing life for many again. Keep Calm and Carry On, put one foot in front of the other, keep your head down and quietly hope and pray that EGBOK. Embrace a life of austerity nostalgia—that is what it asks you!

It all stinks of resignation. It breeds apathy. It stunts growth. It makes you poorer. It erodes your independence and confidence. It seeds negativity, discontent, and blame. It begs you to be content with weekend muddles in the woods with your trusty labradoodle, Rusty! It works for the government that holds no practical answers to private business owners’ economy. It also works for your competitors, so long as they don’t get duped into embracing it.

The antidote is to live and lead with a growth mindset.

A growth mindset embraces the environment for what it is but directs energy and effort only to what you have control over. It allows your actions to be led by your vision for your company and yourself as a business leader. It wears a lens of opportunity, recognising that uncertainty changes the status quo and cracks open new opportunities. It acts, despite uncertainty, and embraces failure as a teacher, not a measure of who you are. In times like these, competitors will hesitate to invest in the changes needed to adjust to the changing circumstances of their customers until certainty begins to calm the stormy seas of the economy.

And whilst they do as they are told and “Keep Calm and Carry On”, you will be eating their lunch!

Written Pavlo Phitidis, Aurik Co Founder & CEO.

To recap, for the last few weeks, we’ve been talking about how to build a 100 million company.

There are five layers that a business owner needs to build to ensure that you can support your company valuation. How you act and direct your team across each layer changes over four stages of growth, from start-up to scale-up, ramp-up, and value-up.

The first layer is about positioning—it answers the question “what makes your business special in your customers’ experience”.

The second layer is the delivery system, which is all about designing processes, activities, and systems based on the experiences your customers want.

The third layer is about getting the right people to do the right thing at the right time and at the right price.

In this podcast of the Money Show, Pavlo Phitidis unpacks the fourth layer in “Building a R100m valuation company” [GROWTH]

The fourth layer is all about growth.

With your time now split to only 30% on operational and management activities because of the first 3 layers, you have time to focus and lead growth. There are several different types of growth you must generate to both lift revenues and deepen profit, and one without the other is of little value.

Growing revenue is about increasing your company’s revenue, while growing profit is about increasing your company’s profitability as a percentage of your revenue. In effect, you want to increase the “gap” between your revenue and your costs to increase profitability while also increasing the quantum of revenue to increase profit.

The first three layers see you with a company that serves well-defined customer segments whose ideal customer experience you’ve determined in the Positioning layer, which is then built out in the System of Delivery layer and brought to life in the Purposeful People layer.

Accelerated Growth

Your job now is to accelerate your growth with your current services and offerings by leveraging these 3 layers to dominate in your segments. Doing so increases your market share in each of the segments you have chosen to dominate and increases your ease of finding, winning, and holding clients through referrals or word-of-mouth and brand familiarity. If you maintain your first 3 layers and don’t veer from the simplicity of the business model they offer, increased revenues will be serviced by an experienced and well-capacitated System of Delivery and team. Put differently, the same cost base of your business will generate increased revenues, widening the gap that drives your profitability. It will also mean that your team can drive this growth, releasing your time to focus on next-level growth.

Next Level Growth

This is growth that generates a significant impact on your profitability with little impact on your service or delivery costs. It’s also vital to diversify your company’s risk to create sustainability and increase your valuation multiples. Getting this right must again be done without disrupting your first 3 layers too much. Too much disruption or completely disassembling those layers will pull you directly back into your company’s engine room and the daily, weekly, or monthly grind of operational and administrative activities.

To get it right, use the time you have released to find new customers in different industries or sectors. By this, I mean customers who have the same problems that need solving and that your products and services can solve much like they do for your current customer segments. Then evaluate the similarity of the experiences that those customers want in order to support you. Their ideal experience must be as close as possible to the current experience you generate for your current customer segments. Again, this means that there is as little disruption to your first three layers as possible.

The result will be an entirely new seam and stream of revenue from the new customer segment in the new industry, served off the back of an experienced, capable, and moderately increased cost base. A significant jump in revenue, with much of it flowing down to your EBITDA or post-tax profits. Achieving this with little disruption to your first three layers means that your team can lead it and, again, release your time to focus on capital growth.

Capital Growth

This is about locking in your future revenues and further deepening your profits. It is essential if you wish to secure a clean future exit at a premium valuation. Your focus here is on productivity, efficiency, and technology. Productivity is typically calculated as revenue per employee. Efficiency is calculated as time/activity, and technology is measured by automation—in your business or in your client’s business, which you have put in place.

Productivity gains are gotten through working with your team. Identifying process-driven activities and the ‘gaps’ between your business systems that compromise coordination (For example, lead generation not handing over effectively to lead conversion) is the low hanging fruit. Business systems need constant attention and development!

Efficiency comes into play when you identify with your team how you can enjoy more value for the same cost of an activity or engagement, or alternatively, the same value for a lower cost. Often, gains are found in your business systems that can be optimised and integrated more effectively.

Technology gains can see many productivity and efficiency gains automated inside your business. Outside your business, you see technology innovate and advance the capability of your service or product. For example, I.O.T, A.I., ML, additive printing, and many more technologies available invite significant gains in value to your customers and clients. Instead of running an in-person sales team, create a virtual showroom and offer sales calls digitally, weekly rather than six times a week in person.

Leading this aspect of your business evolves over time.

Starting up—growth is focused on transaction volume and velocity of clients until you identify how to position your company 

Scaling up – growth must be generated organically as a result of this stage, freeing up your time to focus on the next stage.

Ramping up—accelerated growth is the order of the day.

Value optimization –  next-level and capital growth should take up 70% of your time during this phase.

Getting growth right needs the first three layers in place. After that, it needs a vision, targets, and discipline – don’t get distracted!

To recap, over the next few weeks, we are talking about how to build a 100m company.

There are five layers that a business owner needs to build to ensure that you can support your company valuation. How you act and direct your team across each layer changes over four stages of growth, from start-up to scale-up, ramp-up, and value-up.

The first layer is about positioning—it answers the question “what makes your business special in your customers’ experience”.

The second layer is the delivery system, which is all about designing processes, activities, and systems based on the experiences your customers want.

The third layer is about getting the right people to do the right thing at the right time every time and at the right price.

Building and growing a business towards a 100 million valuation 20 years down the road is simply impossible without a high-performance team.  It’s simple logic. Without a capable team, it’s just you doing everything and holding everything together. This makes your business a job and, at best, you might attract a small buyer for a small price who wants that life.

In this podcast of the Money Show, Pavlo Phitidis unpacks the third layer in “Building a 100m valuation company” [Securing a purposeful team]

Getting the right people

Recruiting the right people is the first challenge. You need to know what talent you want, why you want it, and where to find it. Broad job descriptions based on functional roles doesn’t work, you need to think about hiring in terms of performance. If you are looking for a salesperson, how do you specify the talent and skill sets you need? Good salespeople have similar attributes, skills, and experience. Yet, of the many you’ve hired, most have probably not stuck around, leaving at great cost to your business. Rather, recruit against a system that you want that person to operate, innovate, and manage. It’s far easier to recruit against a set of activities than a set of CV of bullet-pointed attributes.

Doing the right thing

Once on board, getting that person to be able and capable fast is the next challenge. How do you train and then performance manage that person if the job description is shaped as a broad function, like sales? Simply performance managing against targets that a salesperson must deliver, for example, 5 new customers a month, is sure to fail. A sales system includes valuable content and activities to enable a salesperson’s success. For example, who are your customers? How do they buy your products/services? What are their key motivators and concerns? How do you resolve objections? Organizing activities that generate a measured outcome into a sequence allows you to measure performance more closely and usefully.

Arguably, one of the biggest challenges in a business is deciding how to delegate effectively. Delegating responsibilities to a team member only to have to do it, check it, confirm it and so on defeats the purpose. Delegate a system, not instructions. This is the key to unlocking delegation success and performance.

At the right price.

Despite the fact that education, skills, and knowledge are widely available, finding the right talent as you grow and are under pressure might make you think that big, hefty degrees and a weekend course at Harvard require you to pay big salaries. As private businesses, we cannot compete with corporates on salary and must build our businesses more smartly as a result. The key here is the system you employ to perform that function. Again, if it’s built to the specifications of your customer experience, you can afford to get a person with less experience and no Harvard degree to run it and grow from there.

Leading this element of your business changes over time too.

Starting up—get a team on board that is inspired by your vision and wants to be part of the future. The more cross-sectional their appetite to learn, do and help, the better, since in the beginning, you need a jack of all trades.

Scaling up: Specialize your team into functional areas of marketing, sales, operations, and so on. Working with them, build the business systems in a manner that has them co-creating the systems with you. It makes people feel valued, accountable and it automatically sets the standard and bar as to how they need to perform.

Ramping up – get your team to build capacity within each of their functional areas. As leaders, they need to be more strategic and have their underlying team do, so that they can lead the constant improvement of each functional system and coordinate between them.

Value up – lock your key team into the future of the business. Any buyer who is paying a premium price for your business will want to know who is going to deliver the growth and performance in the future that you’ve enjoyed in the past when you leave. A committed, high-performing team adds a full multiple onto your valuation, adding a significant uplift on your market valuation.