How Complex Is Your Business?

While working with one of my clients whose medical practice has been growing very rapidly, the subject of maintaining organizational focus and culture came up.  As our discussion progressed I was reminded of a few flip charts Brad Sugars, the founder and chairman of ActionCOACH, presented at one of our conferences.  Brad first drew a two person company with one direct connection between the people. That flip chart looked something like this:Two Connections The next flip chart showed a three person company that had three direct connections between the people, looking something like this:Three Connections His third flip chart was a four person company with six direct connections: Four Connections Brad’s final flip chart was of an eight person organization showing twenty eight direct connections. Eight Connections My client, with a stunned look on her face, saw this and said “No wonder I’ve had so many problems controlling the growth of my business.” Just to recap: connections table The simple formula for this is:

Direct Connections = ((Number of People * (Number of People – 1) / 2)

Using this formula it is easy to see that the level of complexity in a company grows at a much greater rate than the company’s growth rate. Is your business starting to look a little bit more complex than perhaps you realized? So how are we to grow our businesses, maintaining organizational focus and effectiveness?  There are four key things you must accomplish in order to grow in control:
  1. Have a clear company Mission, Vision and Culture (MVC) – A strong and clear MVC that is aligned and congruent with your company’s Unique Value Proposition (UVP) is the cornerstone of healthy consistent growth.
  2. Communicate and Educate – You must constantly communicate your MVC and UVP to your team, both internal and external, and to your customers, both existing and potential. You must educate new team members and potential customers about your MVC and UVP and the Why behind them (Read Simon Sinek’s book “Start With Why” for further insight).  And most importantly it is absolutely essential that you eat, sleep and breathe your MVC and UVP.
  3. Plan your organization – Although many like to promote flat organizational models, completely flat organizations quickly lose their effectiveness as they scale up. Thus it is vitally important to plan the organizational structure of your company.  At one end of the scale, completely flat will not allow for effective growth, at the other end of the scale, old fashion command and control will compromise creativity and nimbleness.
  4. Be Proactive – Most companies grow organically, without very much forethought or advanced planning. Too often companies reach the point of no return structurally and fail.  All of my clients have a vision of how their companies will be structured working backward from three to five years in the future.  You should do the same.
My ActionCOACH colleagues and I will be happy to assist you to develop your MVC, UVP and Organizational Structure, all of which will prepare your business for exceptional growth.

Why You Need Written Plans

“Planning without Action is futile, Action without planning is fatal” Unknown

One of the most profound concepts I have embraced since joining the ActionCOACH team is the many positive results of having written plans.  It is commonly believed that those who have written plans outperform their contemporaries by a large margin.  While the often quoted alumni studies at Harvard or Yale are urban myths, one actual study conducted by Gail Matthews at Dominican University, (to you can read her research summary click here) provides empirical evidence for the effectiveness of three coaching tools:
  • Accountability,
  • Commitment and
  • Writing down one’s goals. This study demonstrates that writing one’s goal enhances goal achievement.
You may fall into the group, along with the vast majority of people, who tried writing a plan on one or two occasions only to conclude that planning does not work.  Perhaps, you bit off more than you could reasonably accomplish, set unrealistic deadlines, did not set deadlines or your plans and goals were not specific enough.  Maybe you believe or concluded that planning is useless because plans are obsolete as soon as they are finished.  Regardless of your reasons for not planning in the past, I urge you to consider planning your business and your life starting now for the following reasons and benefits. First of all, planning is an ongoing process.  The main value of planning is periodically thinking about your business and your life in an organized manner.  When a planning process is followed, several things naturally occur:
  • You attain focus – you weed out the noise that naturally occurs in your life
  • You prioritize – things in a logical order prevent you from over committing (biting off more than you can reasonably accomplish).
  • Your filters open – your conscious and subconscious mind are opened to collect the resources, knowledge and partners you need to achieve your goals
  • You communicate – a plan is a great communication tool to use when you delegate and seek assistance
  • You create a great “rallying point” for your team
As Benjamin Franklin said, “By failing to prepare, you are preparing to fail.”  We all have only twenty four hours in a day.  Effective use of time has a direct relationship to a person’s level of success.  It is what separates the successful from the unsuccessful, in all aspects of life.  Having plans will greatly increase the results you achieve from your twenty four hours. Finally, and most importantly, most businesses develop and grow organically, with little or no planning.  Many grow and reach a “point of no return” where, for example, they may be supporting an inefficient or counter-productive structure, the right people in the wrong roles or the wrong people in the right roles, or worst of all the wrong people in the wrong roles.  Their business may not be able to adjust to current market conditions in a timely fashion.  They might have over-expanded, under-expanded, passed on a promising opportunity or pursued a disastrous opportunity.  These situations become disastrous after a business passes the point beyond which it cannot “undo” and restart without more investment of time and capital than is available.  Thus, it is essential to avoid growing organically and hitting the point of no return by adopting a planning process as early as possible and of course sticking to it.  You can either have a reactive business or a proactive business.

There’s nothing so meaningless as …

The other day I was reading an article in the February 2014 edition of Entrepreneur Magazine (yes, I am a few months behind in my reading) that struck a chord with me.  At first I considered writing my own blog post on the same subject, and then I realized that I couldn’t have said it better than John Shook did in the Q&A piece about the lean movement. In his answer to the first question is a fabulous quote that nails the importance of adding value; “There’s nothing so meaningless as doing efficiently that which should not be done at all.”  Of course, the value created must be in concert with the customer’s definition of value. The second answer addresses the value of planning, as does the fourth answer.  Finally, the fifth answer recognizes that planning is an ongoing process. I hope you enjoy this insightful Q&A.

A BFO About Business From Sid Caesar’s Obituary

I was saddened to learn of the passing of the great comedian Sid Caesar, he was one of my favorites.  While reading the obituary in my local newspaper, I realized that one of Sid Caesar’s major pioneering milestones led to a business problem that business owners and leaders can learn an important lesson from. On January 28, 1949 Sid Caesar’s first TV comedy-variety show, “The Admiral Broadway Revue,” premiered.  The show was sponsored by Admiral Corp., a manufacturer of home appliances, including TV sets.  Sadly, the show only lasted until June 3, 1949.  The show was a victim of its own success, cancelled mostly because Admiral could not keep up with the demand for its TV sets generated by the show. So what is this important business lesson?  While coaching my clients who are planning a new initiative, be it a marketing campaign or a product introduction for example, I often ask “Are you prepared for this to work?” Is your team prepared for the additional volume?  Are your factory and distribution channels prepared?  And so on.  It is often said that business is all about managing risk, and so many business owners and executives I find, focus only on the negative risks of business.  “What if this doesn’t work?”  “What if we fall short of our target?”  The lesson here it that there are also positive risks that need to be considered when planning anything in business.  “What if this works?” is one of my best coaching questions.  You should be asking yourself as many positive “What if this works?” questions as negative “What if this doesn’t work?” questions. Sid Caesar, thanks for the laughs, and thanks for your tremendous legacy in entertainment.  The entertainers who were influenced by you continue to make us laugh and smile. By the way, while researching this blog post, I found the following link to videos of “The Admiral Broadway Revue.”  

Napoleon Hill Got Me Thinking (Again)

I recently tweeted one of Napoleon Hill’s best quotes “A goal is a dream with a deadline.”  As I was typing, I realized that simply tweeting this quote did not do justice to one its the very important points. During our quarterly planning GrowthCLUB workshop we invest a considerable amount of time discussing the definition of a goal.  Actually we discuss what makes SMARTER goals.
  • Specific
  • Measurable
  • Attainable
  • Relevant
  • Time Sensitive
  • Extending capabilities
  • Rewarding
We can and do have extended, in depth discussions about this subject, there are many, many layers to it.  Yet, in a simple eight word sentence Napoleon Hill captures the essential message. So I ask you, what are you doing to turn your dreams into goals, into plans, into action?