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2018 is coming to a close and, as we head into the festive break and switch on the ‘out of office’, it’s a good time to review and reflect on the challenges and successes of the past year. 

Are you happy with the position your business is in? Are there areas you want to improve on for the New Year? Have you identified how best to move forwards? Over the past weeks, I’ve covered goal-setting, ambition, the curses of being an entrepreneur and great strategy. Today - for my final post of the year - I am going to share what I think it takes to grow a business effectively. 

To start with, it certainly takes some luck; you have to be in the right place at the right time, have the right people around you. You need to catch a break or two. But if you believe in the Sherlock Holmes adage that, ‘chance favours the prepared mind’, then what does it take to be prepared?

Here are the minimum requirements I think that you need:

1. A clear vision of the future (as you would like it to be) defined in terms of measurable outcomes

2. A set of values that define the way you, and the people in your orbit, will work together and what will not be tolerated

3. A diagnosis of the challenge between you and delivering on the vision

4. A strategy ‘kernel’ outlining the high-level approach to addressing the challenge: your “principles of battle” and the critical factors that will need to be managed

5. One or more value propositions, with assumptions gradually tested through customer engagement, that lead to feasible and desirable products/services

6. A viable business model expressing how those products/services will be created and sold to customers

7. An operating plan that measures how effectively the strategy and business models are being delivered over time

8. A feedback driven approach to leadership and management

9. A system that integrates these various components into a process that can be followed

The core of this methodology is to take a high-level position and convert it into the kind of valuable products and services that move your business in the right direction. Then you can build and deliver them - test it out, see how well they work.

The key is that, at each step of the process, you are measuring what is actually happening - not trusting to luck - and sensing whether you are moving in the right direction or not. Then you need to ask what you should do (whether it’s ‘more of the same’ or ‘make a change’).

Adopting almost any of these practices will give you an advantage but the real benefits begin to stack up when you approach them systematically, with the outputs of these processes feeding into each other. 

So, if you’re looking to kick off the New Year by being more effective with your business, this should give you some food for thought to digest over the break. 

Next up - how to develop a great vision statement. Until then….

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You are playing two games, fighting two battles - the one going on in the office and the one going on in your head. Every entrepreneur has to solve the problem of how to make their business a success, whilst simultaneously battling the consequences of the scarcity of their time, attention, and energy. One of these problems is hard, the other almost insurmountable. 

Most of my efforts are directed towards solving the first - the easier - of these problems: i.e. how to create a vehicle to deliver on your business goals. I say its easier because it’s typically aligned with where you want to go anyway, plus we have a process for doing it. But the mental game - how you stay in the game - that’s your Everest. The best I can offer you is a diagnosis and some pointers for how to help yourself.

In a previous piece, The Five Curses for an Entrepreneur, I observed that there are five evil forces at work in the lives of most business leaders. Forces that conspire to hinder them and prevent them from achieving their goals. They are:

1. Stress

2. Overconfidence

3. Poorly understood business needs

4. Untested assumptions

5. Failure to communicate

If we wanted to create a simple model for a successful entrepreneur it might look something like:

good idea + skill + confidence + passion = success

But this belies the evidence, because passionate, skilful, confident people fail with their ideas all the time. I’ve already mentioned the Startup Genome Report and it’s rather horrible picture of failure. But I’ve been in the London startup scene almost 20 years, meeting a lot of new enterprises along the way, and can count on my fingers the number of entrepreneurs I met who didn’t blend most or all of these qualities.

So if a good idea, skill, confidence and passion are not enough - what else do we need? In developing a talk called ‘The Effective Entrepreneur’. I extended the model to include three further factors: presence, focus, and judgement.

Presence

Are we present in the moment? Or are we absent, distracted or unavailable?

If we are more present, we are more alive to the opportunities and threats that swirl around us. Success can often turn on a chance meeting - sometimes it is not the meeting that you anticipated or planned for.

Yet, so often we are not present and find our head is elsewhere. We’re in the middle of doing something but feel distracted; thinking about - or getting anxious about - our next meeting, tomorrow’s presentation, or next week’s pitch.

Mindfulness practice can help here. It can also be enough to remind ourselves, periodically, that there is no point in doing work that we’re not willing to be in. If you have a co-founder or team members, maybe you should challenge each other to be present?

Focus

This one presents an incredible challenge for smart, creative, people.

Can we focus on one idea, on one product, long enough to make it as successful as it can and deserves to be?

The trap is that smart people believe they can multi-task and that they are not cheating themselves or the opportunities they are working on. Maybe some can. Maybe you are one of those rare Elon Musk types? More likely, you’re like me and would be better off just doing the most important thing in front of us.

Try to remind yourself focus is good. Decide what is most important and do that. This means saying no to things that are less important. This is the right thing to do. If you’re struggling with that you might have a problem with…

Judgement

Do we display sound judgement most or all of the time? Or is our judgement suspect, either in terms of being unable to make decisions, or making relatively poor decisions?

Presence, focus, and judgement are quite closely related to each other. As various factors affect our judgement and decision making, we are far less likely to be as present and focused as we should be. But the most insidious of the three is judgement because, as your judgement suffers, your ability to realise this gets diminished. People with poor judgement are often the last to know!

The only defence that I can suggest is that you need someone in your life who, when they tell you that your judgement is not A-1, you trust them enough to listen and do something about it. This could be a mentor, advisor or maybe even a navigator! But it shouldn’t be a family member or friend (they will find it hard to be objective about your ‘baby’). If you don’t have such a person in your life, or can’t find one, maybe that’s also a signal you should listen to.

Now, let’s be honest here - nobody is going to display 100% faculty across these all of these factors all of the time. That’s not human. So, we have to ask ourselves, “What should I be shooting for? What is achievable? What is good enough? And how would/will I know if I am achieving it?”

Again, this can be very hard to judge if you are on your own. So, find someone who can help you and, in the meantime - listen to your gut. It won’t steer you wrong. Accept that you will commit a cardinal sin from time-to-time,  don’t beat yourself up about it, move on and try to do better tomorrow.

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In business we talk a lot about ‘strategy’ but what exactly does it mean? Well, there are probably about as many definitions of strategy as there are management consultants writing a book. Still, here are a few common descriptions:

“Strategy is a method or plan chosen to bring about a desired future, such as achievement of a goal or solution to a problem.” (The Business Dictionary)

“Strategy is a plan of action designed to achieve a long-term or overall aim” (OED).

“Strategy is plan for achieving a major result” (Deri Llewellyn-Davies)

But there’s a problem. Along the way, in my own work, I haven’t found many of these definitions to be very helpful to clients. Perhaps that is because most definitions refer to strategy in terms of it being a plan. You have to wonder, why do we need this special word?

Of the definitions I have referenced, I do like Deri’s because “major result" emphasises significance, even though it still essentially means, “it’s a plan for something big”.

There are tactics too. These always come up when talking about strategy. And a common question is around the differentiation between the two.  

According to the Merriam-Webster dictionary, tactics are: “The art or skill of employing available means to accomplish an end”. This sounds very similar to the definition of strategy although the emphasis has shifted to “means” and an “end”. The scale and scope of tactics seem to be smaller, more discrete.

But are we really just calling strategy ‘big plans’ and tactics ‘little plans”? And who defines big anyway? Could my strategy be your tactic?

I am therefore indebted to Colin S. Gray, who, in his book The Future of Strategy, outlines a very clear distinction: “The core challenge of strategy is the attempt to control action so that it has the political effect desired. Indeed strategy is all about the consequences of action that is tactical behaviour”.

Gray is writing about military/political strategy but I think his definition applies just as much to the world of business, and I would paraphrase it as: “Strategy is about consequences, tactics are about action.”

For me, this definition very neatly captures what we mean by ‘major result’ and ‘an end’. In that ‘major result’ is very likely to have significant consequences for us, while any specific end, in and of itself, probably doesn’t.

It’s interesting that one of the first definitions of strategy in a business context, from George Steiner’s 1979 book ‘Strategic Planning’, “Strategy is that which top management does that is of great importance to the organization.” is very congruent with this definition. 

From this definition flows the idea that our strategy will employ tactics as vehicles for action, and by evaluating the results of using those tactics we can determine their consequences - whether they advance us towards, or away from, the major result we are looking for.

For it is consequences that matter!

The danger is that often our strategic work is absent a proper appreciation of consequences, because we do not really measure what is happening. If the consequences only become apparent when they reach such a fever-pitch that they simply cannot be hidden or ignored - how does this help us?

So the question we should be asking ourselves, when working on strategy is, “are we anticipating consequences and planning for what whey can tell us?”

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Ambition is the term I use to describe the things you are trying to achieve. We could also say ‘goals’, the ‘why’, ‘aims’ or ‘milestones’. 

It used to surprise me how many people are fully engaged with their business or project without ever really digging deeply into the ambition behind it all. This can lead to many problems down the track. Here’s 5 reasons why that may be the case: 

1. Many roads lead nowhere

A significant problem is that if your goal is too fuzzy (as I have written about in more depth in a recent post), it may not be clear which roads lead towards or away from it. Instead, it tends to be the case that almost all roads ‘look’ as if they might lead where you want to go.

But, if you are doing something particularly challenging, it is likely that only a few such roads will actually lead to your goal and most of the others are actually closed off completely. 

For example, with a goal such as, “I want a multi-million pound business”, you need to think about whether that is 2 million, 20 million or 200 million? Far more roads will lead to 2 than 200. 

2. Insufficient motivation

The day will come when your business requires you to crawl - naked - over broken glass to get things done. Does this sound like fun to you? It sure doesn’t to me. 

And this is the point, entirely. While things are fun, everyone can be an entrepreneur. The question is, what you do when things are not fun? This often comes down to whether you really want the thing at the end.

I often meet people who have big goals that they don’t truly want. And by want, I mean in the sense that they will walk over broken glass to get them.

3. What does it do for you - really?

Related to my previous point, I have experienced that even people who know their goals and have the motivation, still don’t really know what achieving those goal will do for them.

I’ve sat with entrepreneurs who want a business worth hundreds of millions of dollars but don’t have a strong sense of connection to what that will do for them, personally. 

This is probably satisfying some deep ego-need but seems to me to be a flimsy thing to build a business upon. It risks doing all of that work - suffering all that suffering - only to realise you don’t want the thing you fought for.

That doesn’t necessarily make your ambition wrong, but want anyone I am working with to be happy with what their blood, sweat, and tears buys for them.

4. Unobtainium

‘Unobtainium’ is the stuff of sci-fi movies and represents any fabulous metal that does not (and perhaps cannot) really exist. And some goals are like that. They do not represent a possible/probable outcome for a given combination of opportunity and risk. The danger is that you take the risk and put in the effort only to, inevitably, come up short.

I suspect there is something psychologically comforting about these big unobtainable goals. Few people will criticise you for claiming you want to ‘build a billion dollar business’ (although they may roll their eyes a little) - it’s kind of what’s expected these days.

At the same time, nobody will be very surprised if you fail because you were shooting for the moon. And failing at something huge maybe seems more worthwhile.

I think it takes more guts to say you’re going to build a solid £150m pound business and lay out the concrete steps around how you’d do that.

5. Low-hanging fruit (or, it’s hard to find balance)

The flip-side of an overambitious goal is one that is not ambitious enough - that doesn’t actually motivate or inspire. This is often the result of casual thinking about goals and plunging into something without really nailing why you are doing it.

Simon Sinek has written very cogently on ‘starting with why’ and whether you read his book, watch his TED Talk, or follow one of the many people who also talks about this the point is that it is well worth establishing the right goals before you begin.

The right kind of ambition looks at the risk you are taking, the effort you will have to put in, and balances those with rewards that are obtainable and that you really care about.

Think of the worst thing you can think of. Ask yourself if you would endure that to get what you want. If the answer is no - think again. If the answer is yes - forge ahead. If the answer is maybe - you still need to tune risk and reward. And now - before you invest your effort - is the time to do that.

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I don’t think anyone would argue with the idea that goals are a critical aspect of running a successful business. Although, it’s often been my experience that peoples’ goals are either too fuzzy, too under-ambitious or too convoluted to really help them.  

In my work I tend to distinguish two main types of goal, and both kinds must be used for the desired impact:

1. Horizon goals - these represent our understanding of what ‘winning’ looks like. This might be an exit valuation, profitability of a business or a desired social impact, e.g. ‘1 million people have access to fresh drinking water.’

2. Proximate goals - these represent desirable waypoints on the journey to winning, that are more predictable and easily attainable than the horizon goal.

A classic example of a horizon goal is the May 25th 1961 announcement by U.S. President John F. Kennedy, that the U.S., “should commit itself to achieving the goal, before this decade is out, of landing a man on the Moon and returning him safely to the Earth.”

Now, this was certainly a laudable ‘win’ for the U.S. in the space race, but I’m not entirely sure how James Webb - then head of NASA - was feeling. Although he had conceded that it should be possible, NASA had no plan. I would not be entirely surprised if a mild sense of panic accompanied this public pronouncement.

That’s another sign of a good horizon goal. You’d like it to come about but you feel a mild sense of fear about how challenging it appears. If you’re not a little panicked, the question might be, “Is this goal worthy enough?”

If Kennedy had said, “Okay NASA, speak to you in 8.5 years,” he might have been in for a rude surprise come July 20 1969. Maybe the goal would turn out to be impossible, or maybe much of that time would have been wasted chasing up blind alleys?

Landing a man on the moon and bringing him back alive was a massive undertaking. If you were James Webb sitting in your office on the day after that first announcement, where would you even start?

A proximate goal could have been, “Get a man to orbit the moon and come back alive.” This is a useful goal because, if we could do this, there is a more plausible chance we can achieve our horizon goal. Yet still, this could be seen as a major challenge (in fact, it would not be achieved until December 1968 - some 7 years after the original challenge was set).

A more proximate goal would be putting a man into Earth orbit and return him safely, which was achieved in Feb 20 1962. This is a useful proximate goal because, again, it is on the path to our ultimate goal but it was also somewhat understood how this would be achieved.

From all of this, we can see that proximate goals form an arc, over time, leading towards the horizon and, at the same time, a set of go/no-go checkpoints as to whether that horizon goal is achievable at all.

In most cases I think it makes sense to define proximate goals in terms of a month, a quarter, and a year, which creates a nice blend of the close at hand and mid-term. I’ve no objection to planning over a longer term, but we need to understand that things change so quickly that 3-5 year plans are often outdated before the ink is even dry.

When setting proximate goals, the closer the time frame, the better understood the goal should be in terms of our ability to execute on it. Meaning, do we understand how we will achieve the goal? And do we have the skills, tools, and resources required to achieve it?

Setting a goal we plan to achieve in a month’s time is highly likely to fail if we don’t know how it will be done, nor have the tools, resources or skills required on hand. 

This might suggest that our goal is too ambitious and should be broken down further. It might imply that our timeline is unreasonable and that our horizon goal needs to be moved out. It could be that we need to marshal new skills and resources to achieve it on time. In my experience, it’s better to know this as early as possible and adapt our plans, rather than realising after 8 years that we’re not going to the moon after all!

So, in order for a business to thrive, you need ambitious, meaningful, horizon goals that both challenge and motivate. And a series of proximate goals that guide you along the way or help you to understand when you need to change course.

“Shoot for the Moon; you might get there”, said Buzz Aldrin. Are you setting the right kind of goals to get to take you where you want to be? 

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