Businesses are complex, they involve many tangible and intangible levers, resources and systems to deliver a customer value proposition, an employee value proposition and a profit. Becoming a successful business owner is a goal all our clients share and the objective for all our advisors at Advantage Business. The following is a summary of my thoughts borne out of my own business experience. The summary predominantly covers the more intangible human aspects of business aimed at achieving breakthrough business results. To begin its journey, a business needs a strategy (map), a business plan (journey plan) and purpose (the reason for taking the journey).

  • The strategy sets the scene.
  • A business plan sets the objectives.
  • Leadership sets the attitude and purpose.
  • Culture sets the performance.

Without a plan, the business is rudderless and the default position becomes the hope plan! There are, of course, many successful businesses that operate on the hope plan, the question is, how much more successful could they have been and what opportunities were missed? How sustainable are these businesses and how stressful was the journey for the owner?

 

Vision and Purpose

Once the strategy and the business plan are defined, it is up to leadership to continuously communicate this as a shared vision with key objectives. While it is great to have a rudder and a captain to steer the ship, if the destination and reason for the journey are not shared with the crew, the team performance (culture) is highly likely to set off on its own agenda. People need to understand what the company really stands for, otherwise known as its purpose or the “Why”. The “Why” is not a sales slogan but rather an emotional connection to the business. It describes, energises and engages employees, engenders pride and is a reason for them and you getting out of bed in the morning. Being able to communicate a clearly defined vision and purpose creates a shared understanding, shared ownership and a high level of engagement for people. Evidence shows that high employee engagement results in improved bottom-line results, more effective performance and low staff turnover.

 

Leadership

Inspiring leaders are authentic and transparent. They continuously communicate a shared vision and model company values and behaviours. They operate with integrity, transparency, celebrate and acknowledge success and provide an opportunity for their people to thrive and grow. An authentic leader does not place blame or focus on the past. They look to the future, use opportunities for growth and continuous learning, extend trust, seek and accept feedback from others and encourage decision-making as freedom within a framework. This type of leadership typically exists in a high employee engagement environment. Employees understand their role in the plan, can operate in confidence and trust and can hold others to account without blame or personal agenda. They feel united, safe and with a common purpose. The behaviour you set as a leader is a standard you set for your staff.

 

Business Plan

An effective plan will be linked to strategy, will be time-bound, supported with the appropriate financial and people resource and be realistically attainable. Having an ambitious plan is encouraged but if financial and people resources are too thinly spread, objectives will not be achieved, and core performance is likely to be negatively impacted. Unforeseen opportunities will always arise during the year and there is always a temptation to chase these opportunities without consideration for the impact on people, resource or current business activities. The plan and the strategy should be the guiding principles for uptake or declining of new opportunities. Ultimately the goal is to stay aligned with what really matters in terms of achieving planned outcomes and retaining people. A plan is only as good as the process that is in place to manage it, it must be measured, reviewed and when off-track, action taken promptly.

 

Performance Culture

A business culture provides the framework for the execution of the plan, in other words, the behaviours and performance that can be expected from a team to deliver on expectations. The culture or performance needs to match the expected outcomes, if the performance is right then the outcomes will take care of themselves. It is my experience that to deliver on plans and promises, a performance-based culture is required. Performance cultures hold people and teams to account for failure or breakdowns, measure progress and performance regularly, provide timely and frank feedback, value diversity and have a collective responsibility for failure, risk and pushing boundaries. They leave egos at the door and have only one agenda which is breakthrough performance! Breakthrough-performance involves having straight-up conversations, self-leadership and personal alignment with organisational values.

Among the various elements that make up culture, values are a critical component. They underpin behaviours, attitudes and how we choose to manage relationships, conflicts, commitments and have conversations. If a business does not identify the specific values it requires to operate by and take the time to ensure employees understand the consequences of values misalignment, individual employee’s values will override desired behaviours. The resulting behaviour is conflict, agitation and hidden agendas. Values alignment should always be a consideration when recruiting employees.

 

Projects

Business is generally an organic entity, constantly changing and growing depending on legislation, growth, market dynamics and opportunities and threats. Projects and plans are a natural way to manage these changes within a defined scope, budget and specification. Unfortunately, the nature of projects is that they are at times predictable in their unpredictability. There are often many reasons or stories that provide compelling reading as to why projects and tasks derail or come to a breakdown. There are often good reasons why projects breakdown, (failure to meet a commitment,) but a good story plus no result still equals no result. Regardless of the story, the sooner someone calls the project at a breakdown, the sooner it can be put right.

Much like health and safety incidents, there is always a series of events that lead up to a breakdown. Any of which, had they been called out at the time would have either avoided or mitigated a failure through timely corrective action. Unfortunately, human nature at times would rather ignore, avoid, deny or pretend there is not a problem until too late. This is often due to fear of consequences, a lack of support or skill or poor measurement of progress.

Leadership under a performance culture creates a safe environment for people to own up and take personal accountability in a “collective responsibility” environment. The focus should always be on moving forward to solve the problem, not focusing on placing blame or wasting time with a witch hunt. “Through the wounds of failure come the greatest learnings”, or as Friedrich Nietzsche said, “what doesn’t kill you makes you stronger”.  Once back on track, a continuous learning culture will reflect on the incident. Employees will learn from it, take necessary action to improve and then move on.

 

Risk and Failure

Business is inherently risky and calculated commercial risks are often undertaken as part of a business plan or growth strategy. In fact, to grow, a business must push boundaries and take a commercial risk. In that sense, if you are not failing at times, you are not pushing hard enough. Failure is sometimes a consequence of risk and while people are celebrated and cheered for their successes, failure can be a very lonely place. “Success has many fathers, but failure is an orphan”.

Our relationship to failure dictates the appetite for commercial growth and the process for continuous improvement. It is where lessons are learned, and continuous improvement gains made. Unfortunately, mistakes and unforeseen circumstances happen. It is exceedingly rare for anyone to go out of their way to intentionally fail. It is how you deal with these circumstances as a leader and learn from them that speaks to the culture, the resilience and agility of the business as well as the quality control process. In my experience, a culture of blame and mistrust leads to employee frustration, lack of ownership, missed opportunity, underperformance and disengagement. Developing a culture where the team and leadership take collective responsibility for failure and support of individuals is consistent with a performance culture. Of course, repeated failure of the same kind is unacceptable under a performance culture and continuous learning organisation.

As far as business activity risk and particularly health and safety risk are concerned, failure here is not an option. Every business should be actively managing a Risk Management Plan. A Risk Management Plan will identify risks, assess them against a hazard measurement criterion, manage risk under a Health and Safety Management Plan and mitigate or eliminate risk wherever possible.

 

Resilience

Cultivating an environment where business succeeds, people thrive, develop and grow, requires leadership that is inspiring, motivational and at times plain steady in the heat of battle. Decision-making under stress demonstrates either a desired or undesired leadership style in the eyes of employees as it either underpins or negates the desired culture. It is resilience in these circumstances that will define the type of leader/parent/spouse or partner and decision-maker you are.

Small business owners are particularly vulnerable in this respect as they juggle many hats in their businesses. Business ownership can be a very lonely place with limited opportunity to share problems or escape sustained stress. From a wellbeing perspective, leaders need resilience in both mind and body to rationalise, problem solve and prevent inertia. Everyone handles stress differently but what we know is that stress is a killer of businesses and people if not managed. Sustained stress is neither good for the heart or mind.

What has worked for me is a wellbeing routine focused on staying healthy, fit, and maintaining a positive mindset. That might include walking, gym, meditation, holidays, or some form of personal development. Whatever works for you, as long as you stick with it. Habits take 6 to 8 weeks to embed so persevere. I also recommend finding a business advisor (not to beat my own drum here) and developing a network to bounce ideas off and share knowledge. A problem shared is a problem halved.

 

Final thoughts

Strategies, plans, systems and resources may be perfect. But the extent of success or failure will be measured by the quality and management of people resources, leadership and the type of culture the business operates from. Business is people. Good business requires people with the right skills, attitudes and resources to execute the plan. With that in mind, to operate a successful business, owner/managers need a high degree of leadership capability and self-awareness to get the best out of their people.

Exceptional leaders recognize their personal and company skillset shortages. They hire or outsource areas that either upskill, add value or add diversity to current thinking and decision-making. Aside from this, they have a planning mindset; a fundamental understanding of finance; personal resilience based on sound management and care for their own health and wellbeing as well as those around them. The current leadership has been heavily influenced by the last 30 years of a focus around profit. While profit is important, more and more business owners are realising that people management is a critical component to business growth and cost reduction. Recruitment, retention and employee conditions are constant concerns as employers look to retain, attract and develop quality people. A company’s culture and leadership are more likely to either retain or lose good people more than any other single element.

Being able to develop leadership, maintain the right culture, ensure staff are engaged and recruit the right people is a challenge for all businesses. I would highly recommend the REACH Eco-system program as a framework to inform, identify, train and implement change. REACH provides a personal and team profile psychometric analysis, 360-degree leadership feedback and a culture/engagement survey to provide a systematic process to achieve these things. REACH can profile specific positions in your business and recruit to that profile. I am happy to share more with you or find out more on our Leadership and Development page.

Failure to deliver on projects and commitments still reigns as one of the biggest challenges for businesses. Nearly 80% of businesses (large and small) fail to deliver on their plans. The successful execution of a plan will come down to the way the plan is measured and monitored. But also the type of leadership, communication, values and culture in practice. There is always a good story to be had for non-achievement but no result plus a good story still equals no result!

In summary, a business that has great plans, a sound balance sheet, proven systems, a performance-culture and inspiring leadership is not only a successful business but a resilient business. It is most likely to beat the competition, attract and retain great staff and is more likely to survive external shocks such as COVID-19.

By Steve Alesech | Business Advisor