“You are cleared for take-off.”
“Just a moment. What does that button do?”
Let’s be honest, you’d never attempt to fly a plane unless you were totally confident with the controls, had been properly trained and knew exactly how everything worked. But when it comes to a business taking off, that’s exactly what many owners do. They hope their business is going to fly but don’t understand the key mechanics involved or have the right systems in place when things go wrong. Is it any wonder that so many businesses end up in trouble?
Of all the new businesses created every year, barely 40% will survive to see their fifth birthday. It wasn’t that these companies weren’t driven by people full of energy, ambition and great ideas, it’s because there were key areas that weren’t operating properly and they were unable to fix them fast enough or efficiently enough.
Cash is often at the heart of business problems. If your company isn’t functioning as well as it could, banks and investors aren’t going to rush to lend you money. But financial problems are frequently out of my control you say. You can blame market forces, changes in consumer habits, currency fluctuations, new competition, Brexit even, but part of being in business is being prepared.
You know that there will be difficult times ahead, it’s about having the right strategy, the right people and the right systems in place to deal with them. Investors are more likely to get behind someone who has a strong, clear understanding of their business and where they’re headed. Lack of knowledge won’t just hit your bottom line, it will affect the team around you, it will have repercussions regarding people you want to hire and keep.
So which part of the controls don’t you get?
The evidence shows that most scale up businesses have weaknesses in some part of their operation. Research among hundreds of businesses shows us that companies tend to be weakest in areas of vision, purpose, and strategy implementation. Why should these be so problematical? It’s because they’re too easily ignored. They’re the flashing lights you think you can get away with.
If you can’t explain the fundamental reason why your business exists, why should anyone invest in you, why should anyone work for you, why should anyone buy from you? Vision and purpose are the principles that guide every business, unite your workforce, set you apart from the competition, and drive you forward. Is it any wonder that businesses which pay scant attention to vision and purpose also fall down on strategy implementation? If you aren’t clear where you’re headed, how you can put together a strategy to get you there?
Do you have a flight plan?
We’ve discovered that fewer than 40% of businesses regularly implement their strategy on a regular basis. That tells us that either the strategy wasn’t good enough, it’s too complicated or the business owner and their team are too busy to implement it. Whatever the reason, it’s storing problems for whatever lies ahead. To go back to our analogy, before you fly, you need a clear flight plan.
And for the plan to get you where you want to go, you can’t make up for weaknesses in one area by being strong in others. You might as well say, ‘I’m good at taking off, but not so hot on landing.’ All parts of your business are interconnected. If you’re strong in marketing, operations and sales but weak in cash and talent, it can come back to bite you. Without strong cash flow, you can’t hire the right talent so your marketing, sales and operations will suffer. Every part of your business is inextricably linked.
And once you have your plan in place and mastered the key components, you must keep learning. Someone who assumes they know it all and doesn’t need to learn any more isn’t the person you want at the controls. If there’s an area of your business you don’t like, or simply don’t understand, find someone who does. None of us can be great at everything, but what you can ensure is that there are people next to you to fill in any gaps. Even the best pilots have co-pilots.
By having all of these in place you can begin to scale your business.