Perhaps the best way to succeed in your business, is to work yourself out of your business.
The better your company runs on autopilot, the more valuable it will be when you’re ready to sell or transition.
A recent survey by The Value Builder Score found companies that would perform well without their owner for a period of three months are 50 percent more likely to get an offer to be acquired when compared to more owner-dependent businesses.
Let your vacation be a detective
There is no better justification for taking a blissful, uninterrupted holiday than to see how your company performs in your absence. To gauge your company’s ability to handle your absence, start by taking a vacation. Leave your computer at home and switch off your mobile. Upon your return, you’ll probably discover that your employees got resourceful and found answers to a lot of the questions they would have asked you if you had been in the building or on the end of an email or telephone call. That’s a good thing and a sign you should start planning an even longer vacation.
You’ll also likely come back to an inbox full of issues that need your personal attention. Instead of busily finding answers to each problem in a frenzied attempt to clean up your inbox, slow down and look at each issue through the lens of a possible problem with your people, systems or authorizations.
People – start with your people and answer the following questions:
Why did this issue or problem end up on my desk?
Who else is qualified to answer this question?
Why did the organization not contact and consult that person?
If nobody is qualified, who can be trained for the future?
In my many years of leading and working with companies, growing the capability of the team is the most important role of the leader.
Systems – next, look at your systems and procedures:
Could the issue have been dealt with if you had a system or a set of rules in place?
Whose department or area should be accountable for developing that system?
Can this issue be solved with system automation to remove the human element?
The best systems are hardwired and do not require human interpretation; but if you’re not able to lock down a technical fix, then at least give employees a set of rules to follow in the future.
Authorizations – You may be a bottleneck in your own company if you’re trying to control all the spending too much.
Did the employees know what to do but did not have any means of paying for the fix?
Can you put in customer service rules with financial limits of authority?
You might empower (and encourage) an employee to spend a specific amount with a specific supplier each month without coming to you first for authorizing every payment. Or you might give an employee an annual budget, an amount they can spend without seeking your approval.
Let your vacation strengthen your company
Given the fires that may need to be extinguished after the fact, taking a holiday may seem more of a hassle than it’s worth. But don’t be fooled – if you transform the aftermath of a vacation into systems and training that allow employees to act on their own, you’ll find the vacation is worth what you paid for it many times over. Your company will increase in value as it becomes less dependent on you personally.
At Executive Forums Silicon Valley, selected business owners and leaders work together to gain clarity, insight and accountability to ignite their leadership engines, grow their businesses and improve their lives. If you are interested in learning more about Business Owner Advisory Boards, Entrepreneurial Operating System (EOS), Stages of Growth, Value Builder System or becoming a member at Executive Forum Silicon Valley, please contact email@example.com or call 408-901-0321. For more information visit http://www.execforumssv.com/.
Have you ever considered making it your primary goal to set up your business so that it can thrive and grow without you?
A business not dependent on its owner is the ultimate asset to own. It allows you to have complete control over your time so that you can choose the projects you get involved in and the vacations you take. When it comes to exit, a business independent of its owner is worth a lot more than an owner-dependent company.
Here are five ways to set up your business so that it can succeed without you.
1. Give Them A Stake In The Outcome
Jack Stack, the author of The Great Game of Business and A Stake In The Outcome wrote the book on creating an ownership culture inside your company: you are transparent about your financial results and you allow employees to participate in your financial success. This results in employees who act like owners when you’re not around.
2. Get Them To Walk In Your Shoes
If you’re not quite comfortable opening up the books to your employees, consider a simple management technique where you respond to every question your staff brings you with the same answer, “If you owned the company, what would you do?” By forcing your employees to walk in your shoes, you get them thinking about their question as you would and it builds the habit of starting to think like an owner. Pretty soon, employees are able to solve their own problems.
3. Vet Your Offerings
Identify the products and services which require your personal involvement in either making, delivering or selling them. Make a list of everything you sell and score each on a scale of 0 to 10 on how easy they are to teach an employee to handle. Assign a 10 to offerings that are easy to teach employees and give a lower score to anything that requires your personal attention. Commit to stopping to sell the lowest scoring product or service on your list. Repeat this exercise every quarter.
4. Create Automatic Customers
Are you the company’s best salesperson? If so, you’ll need to fire yourself as your company’s rainmaker in order to get it to run without you. One way to do this is to create a recurring revenue business model where customers buy from you automatically. Consider creating a service contract with your customers that offers to fulfill one of their ongoing needs on a regular basis.
5. Write An Instruction Manual For Your Business
Finally, make sure your company comes with instructions included. Write an employee manual or what MBA-types called Standard Operating Procedures (SOPs). These are a set of rules employees can follow for repetitive tasks in your company. This will ensure employees have a rulebook they can follow when you’re not around, and, when an employee leaves, you can quickly swap them out with a replacement to take on duties of the job.
You-proofing your business has enormous benefits. It will allow you to create a company and have a life. Your business will be free to scale up because it is no longer dependent on you, its bottleneck. Best of all, it will be worth a lot more to a buyer whenever you are ready to sell.
At Executive Forums Silicon Valley, selected business owners and leaders work together to gain clarity, insight and accountability to ignite their leadership engines, grow their businesses and improve their lives. If you are interested in learning more about Business Owner Advisory Boards, Entrepreneurial Operating System (EOS), Stages of Growth, Value Builder System or becoming a member at Executive Forum Silicon Valley, please contact firstname.lastname@example.org or call 408-901-0321. For more information visit http://www.execforumssv.com/ .
Your Business’ “Grey Wolf” (Part 3 of 3, Organization Rewilding)
The grey wolf metaphor comes from the success in the revitalization of the Yellowstone Park’s complex ecosystem in the 1990s. Through the introduction of a Key Systemic Element (grey wolves), a complete transformation occurred to bring back vitality, life and growth of the park. Similarly, businesses are a complex ecosystem and through the identification and introduction of Key Systemic Elements, in short amounts of time, vitality, life and growth can be accomplished. An expanded version of the Yellowstone Park story is provided at the end of this blog.
In February 2020, Executive Forum Silicon Valley (“EFSV”) members feasted on the insights and wisdom from the book “Navigating the Growth Curve” and Organizational Rewilding concepts that helped them understand, predict and solve the increasing complexity at every stage of company growth.
In Part 1 of this series, 7 Stages of Growth, we discussed that the different stages of growth are based on the complexity of a company (in proportion to the total number of people) and require different “Gates of Focus” – people, profits and process – at different times.
In Part 2 of this series, “3 Faces of a Leader,” we discussed “Hidden Agents” that can derail a company’s growth. These Hidden Agents such as the 27 Classic Challenges, the Builder Protector Ratio (confidence to caution) and the 3 Faces of a Leader (visionary, manager, specialist) must be optimized at each stage of a company’s growth. Also discussed were transitions between stages such as the Flood Zone (overwhelmed by work) and the Wind Tunnel (new systems required).
Here in Part 3, we will be looking at the “Key Building Blocks” and “Non-Negotiable Rules” for growth companies. It is through the analysis of these elements and the previous stages of growth principles – Gates of Focus, Hidden Agents and Transition Zones – that the key systemic element (grey wolf) can be identified to revitalize any company.
First, let’s explore the similarity between the situations that frequently occur in small and medium sized businesses with the challenges faced in the Yellowstone Park. The key point is the first – businesses are complex ecosystems (people, products, processes, places and projects) and as the number of people increases so does the complexity of the ecosystem.
Additionally, in complex ecosystems symptoms may be obvious, however, solutions are not. And because there are unseen forces at work, the situation may not appear that bad (impacting growth) and their ecosystem is not self-repairing. The correlation and similarities are detailed in the table below:
Featured a complex ecosystem
Yellowstone’s ecological system is comprised of complex relationships between flora and fauna.
Businesses feature a complex system of interrelated, dynamic, and living resources. The level of complexity is impacted by the number of employees.
May not have appeared that bad
An untrained eye may not have considered the situation in Yellowstone that dire. The lack of vegetation and animal species mirrored other places in the U.S.
You might not even see areas that are unhealthy or lack vitality. “That’s how it’s always been” or “It’s still better than the last place I worked” are common justifications.
Obvious symptoms, unclear solutions
The obvious problem was the overpopulation of elk. The reintroduction of elk hunting reduced the population, but did not have a dramatic impact.
What is obvious is the surface symptom. Leaders are often too busy or lacking the tools necessary to identify root causes and are stuck playing “whack-a-mole.”
The Park could not solve its imbalance without the involvement of humans, because it was the human eradication of wolves that started the decline.
Leaders must be intentional to identify the missing elements and actively infuse them into the business ecosystem.
Unseen forces at work
The decrease in wolf population had an Instinctive relationshipwith deterioration of the ecosystem. Upon spontaneously communicating the new reality the environment responded.
You don’t have to fix everything. Instead, infuse the right elements and the unseen forces often resolve the other challenges on their own.
Depth of impact unexpected
Inserting a keystone predator had the intended results of reducing elk population. Experts were amazed by the transformation; the breadth, depth, and speed of change was totally unexpected.
When any key systemic element of a business is absent, the entire organization suffers. Infusing the right elements does achieve the expected improvement and the ripple effect will go beyond your expectationin ways you could not anticipate.
Non-Negotiable Rules and Building Blocks
Regardless of the type of a business there are several areas of competency that must be developed, nurtured and mastered at each stage of company growth. These business competencies (non-negotiable rules) fall into six key disciplines – business development, business model, financial systems, operations, leadership values and workplace community and three broad areas (building blocks) – Infrastructure, leadership and culture.
Let’s take an example of how this shows up for a Stage 4 company (35 – 57 employees). With respect to the six key disciplines or non-negotiable rules, a Stage 4 company should be focused on the following items:
Stage 4 Company – Non-Negotiable Rules
Effective marketing campaign management system, repeatable sales process and a customer care program.
Scrub the business plan annually with quarterly reviews.
Established departmental budgets and advanced weekly and monthly key performance indicators.
Implement master processes and allocate 5% of revenue to build and automate systems.
Hire or train professional level managers who are accountable and proactive.
Share project management and foster competition between department teams.
Similarly, with respect to the three broad areas or building blocks, a Stage 4 company should have in place or be working on the following:
Stage 4 Company – Building Blocks
Accountability Charts, basic Key Performance Indicators, Position Role Descriptions should be in place. The Stage 4 company should be working to improve Process Systemization and Weekly Personnel Check-ins.
The Business Model and annual business plan should be in place and the Stage 4 company should be working to train and improve managers.
One on One Discussions, Vision, Mission, Core Values, Brand Values and New Hire Onboarding should be in place.
What Doesn’t Get Done at One Stage Will Hold a Company Back
A complete visual of the non-negotiable rules and building blocks for all 7 Stages of Growth is shown in the following graphic. Be aware, what doesn’t get done at one stage will hold a company back from growing to full potential.
ReWild Key Elements (“Grey Wolves”)
How does a company establish the missing element that is holding back growth? How do you identify your grey wolf? The Rewild Group (www.rewildgroup.com) has established a business assessment that uses all of the elements we have discussed in this blog (Part 1, Part 2 and Part 3) to establish a prioritized set of grey wolves for individual companies. This assessment is primarily driven by data from the 650 companies researched by James Fisher in “Navigating the Growth Curve” and with additional analytical tools that examine relationships between Gates of Focus, 27 Challenges and Non-Negotiable Rules.
The types of grey wolves that are impactful for small and medium sized business are shown in the following graphic. As an example of how this works, Stage 3 and Stage 4 companies that may have low profits (symptom) may benefit most by establishing Master Processes. This grey wolf has the impact of operational efficiency, employee productivity, and speed of product or service delivery which all positively impact profits.
A Stage 5 or Stage 6 company experiencing employee turnover and lost expertise (symptom) may benefit most by an Exceptional Manager Program that builds across functional teams, reinforces company values and addresses needs of lower level employees. This grey wolf better aligns the workforce, improves accountability and engages employees to reduce labor churn.
As shown in Part 1, Part 2 and Part 3 of this blog, the Stages of Growth and Organizational Rewilding are powerful analysis and solution tools to help a company grow and revitalize companies where growth has stalled. Understanding all of the analytical tools – Gates of Focus, Hidden Agents, Transition Zones, Non-Negotiable Rules and Building Blocks – and what is most important at each stage of growth, will help a business leader focus AND help a leader anticipate what is coming down the line. Wouldn’t you feel better if you knew what to do now and what to do next?
Find Your Own “Grey Wolves”, Clarify, Insight and Accountability at EFSV
Reach out directly if you are interested in learning more about the Stages of Growth or Organizational Rewilding, or if you would like to brainstorm about what kind of “grey wolves” are needed to revitalize your company’s ecosystem.
Executive Forum Silicon Valley (“EFSV”) is a platform where successful business owners, CEOs and executives act as their fellow collaborators, co-inventors, partners and even “co-conspirators”, in getting a clear picture of where they want to go, what stands in the way, and how to achieve their respective growth goals. Forum members share resources, conduct self-assessment and identify opportunities. Upon getting clarity in the way forward and strategic insights and the illumination of leadership blind spots, members hold each other accountable with support and encouragement. If you are interested in learning more about the Stages of Growth or becoming a member at Executive Forum Silicon Valley, please contact email@example.com or call 408-901-0321. For more information visit http://www.execforumssv.com/
In 1995, Yellowstone National Park’s ecosystem was rapidly disintegrating. The expanding elk population was defoliating the park at an alarming rate. Yellowstone Park was on the verge of becoming a barren landscape, where many of its resident species could not survive. The solution to this issue wasn’t clear, but the U.S. Forest Service Rangers and a team of scientists knew they needed to act soon.
Grey Wolves Rebalanced Ecosystem
They chose to reintroduce several packs of grey wolves, who had been missing from the park for 70 years, into the ecosystem. Amazingly, within a short six-year span, the park dramatically transformed.
As one might expect, the elk population was reduced, creating smaller but healthier herds. Additionally, the remaining elk population avoided open valley areas so as not to be easily trapped by the new predators. Saplings sprouted in the once barren meadows, providing material for beavers to create new dams. Berry bushes and underbrush created shelter for small mammals. These in turn provided more food for growing populations of badgers, foxes, and birds of prey. Rapid tree growth gave homes to an increased population of songbirds. The river banks were reinforced with wild grasses that were no longer over-grazed. Every level of the trophic chain (food chain) began to flourish again.
Balance had returned to Yellowstone’s ecosystem through one simple change – the reintroduction of packs of wolves. The insertion of the wolf packs as a “Key Systemic Element” rippled all the way down to how the rivers and streams flowed through the park.
Business Organizations Need “Grey Wolves” as Key Systemic Element
We realized that there are powerful parallels between nature’s ecosystems and human business organizations. Many of the businesses we have encountered exhibit the same loss of vitality that Yellowstone was experiencing in the mid-1990‘s. Inserting a keystone predator had the intended results of reducing elk population. Experts were amazed by the transformation; the breadth, depth, and speed of change was totally unexpected.