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The book serves as a guide for business owners and CEOs to create profitable and sustainable businesses while reducing stress and increasing freedom. It emphasizes the importance of understanding the core 'why' of a business to drive success and create motivated teams. The author shares insights and frameworks developed through years of working with mid-sized businesses to help them overcome common obstacles and achieve their goals.

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VISIT US AT www.shirlawscoaching.com More money More time Less stress The business owners’ guide to creating a profitable, sustainable business that rewards you richly in time and money John Rosling
2 “Your motivation is never money, money is only an end result. Your motivation is more likely freedom.” Simon Sinek Acknowledgments This book would not exist without the business insights and knowledge of Darren Shirlaw and the development team at Shirlaws, the international business performance and coaching organisation of which I am UK CEO. Darren is one of the world’s most highly regarded experts on what makes a mid-sized business succeed and what makes the owners and CEOs of these businesses achieve their goals and ambitions. Both as a business owner who has implemented Shirlaws’ principles in my own business and latterly as a member of the Shirlaws team, I am deeply indebted to Darren and all the partners and coaches at Shirlaws in the UK and all around the world. They are a remarkable group of people who change the lives of business owners every day. www.shirlawscoaching.com www.shirlawsonline.com
3 In this book SECTION 1: STEPPING UP TO A LEADERSHIP ROLE Chapter 1 - Understanding context Chapter 2 - Understanding the power of ‘why’ Chapter 3 - Understanding your role as leader Chapter 4 - Leadership in action - creating the why SECTION 2: UNDERSTANDING YOUR BUSINESS Chapter 5 - Understanding your business cycle Chapter 6 - Understanding risk in a strategic context Chapter 7 - Becoming a great communicator SECTION 3: CREATING REVENUE TODAY Chapter 8 - Product - the foundation of your business Chapter 9 - Your intellectual property - the rocket-fuel in your business Chapter 10 - Positioning - your key focus Chapter 11 - The salesforce that never asks to be paid Chapter 12 - Driving energy in relationships Chapter 13 - Creating revenue – A final thought SECTION 4: GETTING YOUR BUSINESS TO WORK FOR YOU Chapter 14 - The fully functional business Chapter 15 - Capacity planning - The secret of controlled profitable growth SECTION 5: BUILDING EQUITY VALUE AND EXITING YOUR BUSINESS Chapter 16 - What really drives equity value Chapter 17 - Leaving your business in good hands SECTION 6: MANAGING YOUR OWN ENERGY SECTION 7: ABOUT SHIRLAWS AND THE AUTHOR APPENDIX: THE RECESSION AND WHAT TO DO ABOUT IT The five mistakes of a recession The five growth opportunities of a recession The five ways to prepare for the recovery
4 “There is more to life than increasing its speed.” Mohandas K Gandhi
5 Shirlaws works with hundreds of mid-sized, owner-managed businesses in 26 countries around the globe. Our job is to help business owners and CEOs to achieve success for their business. Our goal is to see our clients’ businesses reward them richly in wealth, time and fulfilment. Our clients own and run successful businesses. Yet the most common things we hear new clients say are “I want the business to work for me, not the other way round”, “I’m not making the money I want”, “I want less stress”, “I need to scale”, “I want to exit”. It is to address these issues that we have developed, over the last 12 years, knowledge, experience and unique business frameworks and techniques. The purpose of this book is to share this approach to business management with you. I hope this will help in getting your business to work for you (not the other way round). And to give you wealth and choice about how you spend your precious time into the future. Whilst we see hundreds of SME and owner-managed businesses, and every one thinks the issues they face are unique, what is remarkable is that almost all the blocks to a businesses’ progress can be traced back to a few key issues. My belief is that if you can address these “source” issues you can unblock almost any business to achieve its potential – and the dreams of those who founded and run the business. My intention in this short book is therefore to examine each of these source issues and offer some perspective on how we help businesses overcome them. In doing so I hope I can help give you some valuable insight and perspective on your own business. If you are interested in learning more about Shirlaws you’ll find more information about us in the back of this book. If you are interested in having a chat and a coffee, you’ll find my personal email address at the back of the book too. John Rosling Autumn 2010
6 STEPPING UP TO A LEADERSHIP ROLE “There is no map. No map to be a leader.” Seth Godin
7 CHAPTER 1: UNDERSTANDING CONTEXT “The main thing is keeping the main thing the main thing.” German proverb As CEOs of small and medium sized businesses, most of us have had the experience of being so firmly embedded in the day to day issues of running the business that it is difficult to find sufficient time to grow the business. We can get stuck in the detail with the result that the single greatest impediment to the growth of our businesses and the realisation of our dreams can be ourselves. This is not a comment on skills or capabilities (although we could probably all do with constantly learning new skills) but it is a comment on what we choose to focus our time and energy upon. It is a comment on the belief we have created that we have to manage everything because no one will do it as well as we do. The challenge, if you ever want to have your business deliver the wealth and leisure you set out to achieve, may be to find a new way of working. A way of working that really successful entrepreneurs who have built vast and complex businesses - but still seem to have time for ballooning and boat racing - have learnt to do instinctively. You have to find a way of working that manages your business not in content but in context. Context is that which brings meaning. It provides a common language within the business process. It gives clarity to all the content and allows a business conversation to unfold, resulting in aligned decision making and understanding. Imagine a conversation between three directors of a business. Let’s imagine the discussion is about fruit; which is the best fruit between apples, bananas and oranges. Without any context to give meaning to the word “best”, imagine how long that conversation could last
8 and how much energy, management time and focus it could use up. Now imagine the same conversation if a clear context of “Vitamin C” was agreed. How long would the conversational have to last? It is a simple analogy, but how many of us have the experience of management or team meetings where issues become muddled and decisions are difficult to reach. I find working with boards and teams that if they can set a clear context, decision making can be remarkably accelerated - and relationships improved. In fact, most problems in business stem from the fact that there is normally plenty of content, but no context. Context is the wood, content the trees. The context you choose to run your business, project or meeting is, of course, down to you and what you are seeking to achieve. As an example, we are working with a fast growing business that has chosen to work with a context of “learning”. Having this context supports decision making in how the business treats its people, takes decision, and invests money. The result is an ambitious and creative business where mistakes are not a cause for blame but for learning and where the team is motivated and productive. It’s also a great place to work. Context is one of the three key skills that all effective leaders have learnt. So how do you get context into your business? The first and primary piece of context in your business is called “why” and I’ll look at that in detail in the next Chapter. TOP TIPS • Learn the trick of the greatest entrepreneurs; manage in context and leave the content to your team.
9 CHAPTER 2: UNDERSTANDING THE POWER OF “WHY” “Knowing the why can inform your actions as a brand, your brand voice, its character, and everything else that helps build it into something people want to have a relationship with.” Simon Sinek When I took over as CEO of Shirlaws I was fortunate in that I inherited a well managed business. But it was one that had just lived through the worst recession in 80 years. The first thing I focussed on wasn’t revenues or internal cost structures – the content. My first priority was to refocus everyone in the business on their core belief in the busi- ness – the context. I reasoned that if this core belief was strong and shared by all, the commercial success of the business would follow. It would also be a fun place to be. Belief is context because belief in the why makes sense of the what. All business understand “how” they do what they do (their manufacture, sales, delivery, service, admin. etc.), and most (but not all) truly understand “what” they do (the funda- mental intellectual property and rocket juice that sits at the heart of the business, what makes them famous and what customers “buy” (rather than what they sell). But very few businesses really understand the “why”. Which is a pity because the “why” is where the power is.
10 If you think about all the most successful businesses, the ones people would most like to work for, they all have a strong and well understood “why” in their business. It’s this “why” that staff buy into figuratively - and customers buy into literally. Simon Sinek explains this brilliantly using Apple as an example. Apple understands why it exists in its bones and has invested huge amounts of time in instilling this belief in its staff. This “why” is distinct from “what” it does. Apple believes that everything they do challenges the status quo. It believes in solving problems for people through great design. Making and selling computers is just “what” it does. This fundamental belief in a “why” drives everything the business does – it creates the context for all the decisions the business makes. Go into any Apple store and you’ll see the outcome in a powerfully motivated staff who love working there and believe passionately in the product they sell and communicate that passionate belief to customers. Sinek draws the comparison with Dell, a company with a clear understanding of “what” it does but not “why” and shows how this limits Dell. Since Dell has a clear “what” (make and sell computers) and Apple has a clear why (solve problems through great design) customers will only buy comput- ers from Dell whilst they’ll buy computers, music and telecommunications from Apple. And they’ll make every purchase decision when buying Dell partly on price (since it’s a rational “what” choice) but price hardly features when buying Apple, which gives Apple a very healthy margin and a massive valuation. This is the power of position which I’ll cover in detail in Chapter 10). The key reason behind Apple’s success is that people buy values and beliefs over benefits. That applies to the customers you want to attract and the talent you want to Why What How
11 employ and it is as true in the corporate and B2B market as it is in the SME and B2C markets. I’m sometimes asked why I joined Shirlaws when I already had a reasonably successful business and a comfortable life. I had had the experience of applying Shir- laws coaching in my own business and had seen the tremendous commercial return. But what attracted me was the strong “why” I saw in the organisation – the clear intent to help change the lives of business owners through coaching and the transfer of skills and knowledge. It doesn’t of course mean the “what” isn’t important. The quality, effectiveness, and value of what we supply and how we do it is vital - we all make rational (what) purchase decisions every day. It’s just that the “why” is often forgotten in the content-driven, busy world of the SME. And by forgetting it we are missing a major trick. Incidentally, there is a strong and compelling practical reason why people make most decisions in a why (values) rather than what (benefits) mode. To be simplistic our brains are effectively an evolutionary map of development – almost analogous to tree rings. The core or “limbic brain” (sometimes called the “crocodile brain”) was formed before the development of language and what we consider “rational thought”. It is in the limbic brain that “feelings” reside and key decisions are made. The outer layers (“neo-cortex”) are used for language, rational thought, processing etc. So, simplistically, relationship choices (with people and “brands”) are made at a “feeling”, pre-language level and then post-rationalised to satisfy our thinking mind. Clearly, this is highly simplified and everyone is different (which has spawned a whole industry from Jung to Myers Briggs and beyond - we’ll look at this in Chapter 7). But for us, as business owners, it is important to note that beliefs and values are vital for creat- ing effective and valuable customer and staff relationships – far more so than facts on websites, price promotions, or the prospect of pay bonuses (all of which could play a supporting “rational” role). As a bonus you’ll get a fun place to work and marketing and sales will be easy giving you spectacular revenues as well. We’ll look at how this impacts on buying behaviour – and most interestingly our ability to create effective referral networks in later Chapters. So if you want powerfully motivated staff who will take your business to where you want it to go, allowing you to stop “running” your business, you need to create fundamental belief in the “why” in your business.
12 The “why” is about vision and dreams and possibility – not about logical strategies. When Martin Luther King stood in front of a quarter of a million people on Washington Mall in August 1963 he didn’t say “I have a Plan”. So how do you create a “why” in your business? We’ll look at that in more detail in the next Chapter. CASE STUDY: APS When Brian Armstrong and I started APS (www.aps-advance.com) in 1998 in Australia & the UK it appeared to most that it was just another software company to provide prac- tice software around the individual business requirements of accounting and consulting firms. We had both worked in, and left, a more established organisation that was a toxic envi- ronment for employees and clients. We were clear that APS needed to prove that it was possible to build an ongoing and sustainable business in our chosen market place that was truly successful from both a cultural and commercial perspective. That was and is our “why”; the question we asked of ourselves and one which con- tinues to govern our business model today. To us, life is a journey not a destination so we continue to focus on the ‘why’ – as do our teams in the 3 countries in which we now operate – No one is perfect and to say that we have attained a 100% score and maintain it would not be truthful. It does however remain our Intent to never lose sight of this purpose. But for us it was not just the “why” part of the conversation – we also had to get clear about “what” we were going to do to achieve that and “how” we were going to execute it – both culturally and commercially. Culturally our strategy is quite simple – FAMILY – a context that binds core values, we recruit people who are aligned with these and want to be part of this structure. Similarly we form relationships with clients who want the same thing – to be a client not just a
13 customer as is so often the case. Commercially our strategy is also simple – what we do is implement systems that give professional service firms the Information they need to serve their clients and to run their own business. Key to this outcome is developing and maintaining a sustainable Relationship. How we do that is through the provision of Software, its Implementation, ongoing Consulting, Support and regular software Upgrades. Fundamental to this provision of software and client service is the shared and agreed values that are part of our every day language & behaviour – internally and externally – to be Caring, Flexible, Open, Passionate, Safe, Honest – To have the 100% conversation within our team and with our clients. But, for us, understanding the “why” set the whole context and purpose for our busi- ness and enabled us to agree the “what” and “how” easily and with focus. These haven’t changed. Brian Coventry, CEO, APS. TOP TIPS • Find the fundamental “why” in your business - and create a strong sense of belief around it.
14 CHAPTER 3: UNDERSTANDING YOUR ROLE AS LEADER “While Management is operationally focused, setting priorities, allocating resources, and directing the execution, Leadership is more forward thinking, more about enabling the organization, empowering individuals, developing the right people, thinking strategically about opportunities, and driving alignment.” Randy Komisar People who run businesses use various titles but you’ll have noticed I use the term Chief Executive or CEO. That’s because I believe it is your role is to be the Chief – to Lead and not to Manage. That’s why I prefer not to use the title “Managing Director”. If you want to grow your business and have it working for you and not the other way round your role should evolve so that you are not “managing” the business at all. In other words you live as much as possible in “why” and less in “what”; more in belief and less plan; in context not content. Therefore in my own business I am CEO not because it sounds grander but because it describes the role I do and how I want to see it develop.
15 So what is that role? At Shirlaws we believe that the role of the CEO of any business – including SMEs – can be described in three simple concepts: • Set the context • Manage the energy • Coach don’t play Set the context means it is your job to understand the “why” and know where you are going. You create the dream. It means you are “above” and often 6-12 months “ahead” of the business, allowing your team to run the today. It also means you hold the context so that every decision in the business is simple to make in a contextual not content- driven space. It means you understand where you are in your Life Cycle, understand and hold the business to the contextual choices you have made in terms of Risk, Mar- ket Position, Product etc. All these will be covered in later Chapters. Manage the energy means it is your job to create the belief in your why and create a compelling vision for your team. You sit above the business and your job is “feel” your business like an organism and know when things are not right. It is to support the en- ergy and enthusiasm of the team and the key relationships you have outside the busi- ness. I think about it like this. All employees in the business possess a certain amount of energy that can be devoted to progressing the business. If this energy is aligned and “flows” easily through the business there is a greater chance of success. Alternatively if the energy gets dissipated, for example in managing processes that are not working or where departmental heads have different contexts and hence work against each other, energy gets expended inside the business and is not channelled into activities that will result in the growth and success of the business. Coach don’t play means you’re not on the field any more. Your job is to build the con- fidence and skills of your team (over time) so that they have the ability, belief and are given the responsibility to play the game – you create the big picture and then support, observe, and encourage. You coach. That way your team runs the operations of the business and you get to grow the value and scale of the business. You’ll notice that none of these says “run the business” or “deliver the bottom line”. That’s because to have your business work for you, you will need, in time, your senior team to do these management tasks for you. In fact my whole theme so far (manag- ing in context, setting the why) has been about getting your business into the position where it is bigger than you and is not dependent on you. That means your role changes
16 to the fascinating and stimulating role of entrepreneur - and not manager. For many SME owners that may not seem possible right now but if you follow the ideas set out in this book I believe it will become possible. At any event you will have the choice of how much day to day management you want. CASE STUDY: YRM YRM (www.yrm.co.uk) is an architectural company with offices in London, Vienna and Bucharest. Established in 1944 YRM has completed over 800 design projects in 37 countries. YRM is renowned for high quality functional and durable design delivered to agreed budgets and timescales. John Clemow joined YRM in 1978 and leads the fourth generation of YRM’s leadership. “In mid 2007 as the economic storm was looming, I heard Peter Harford of Shirlaws speak at a seminar about sluggish leaderships, succession fall out, and underperforming businesses. It felt like I was the only person in the room, with a laser dot on my forehead. Our top table was an operationally circular partnership model and, as Managing Director, my role was mainly cleaning up the mess left behind by the owner-managers enjoying their own games. I recognized I was in the classic Managing Director position of being well and truly stuck in the content and I brought Peter in initially to coach the Board. We realized we needed to operate as a proper company Board, with a CEO supported by a business structure with defined functions, lines of communication and delegated decision making. I realized I needed to act differently if I was to be a genuine CEO, to take more of a leadership role; to be “in the context” as Peter would say! Peter helped me understand, implement and ultimately enjoy my CEO role. To get the leaders focused and on track, we needed to develop and crystallize our vision and strategy which was both motivating and enjoyable. This gave me a positive framework
17 for dealing with some difficult problems to reverse our trajectory. I selected emerging leaders to prepare strategies for some priority areas of the business. I saw my primary role in energizing and supporting these rising stars. Great work was done which continues on the next set of issues to tackle. Our conversations are mainly on how these strategies tie in to our vision and overarching strategy. It took two years of hard work to embed the changes in thinking, action and attitude. There is inevitably some occasional backsliding which means I have taken my eye off the ball. The panic and frustration that I and my colleagues felt has been replaced by calm determination and a clear sense of purpose. I wake up in the morning knowing what I need to do today and looking forward to the steps needed ahead. We have weathered the storm so far, and I only occasionally need to do a bit of light cleaning”. TOP TIPS • Set the context; manage the energy; coach don’t play
93 ABOUT SHIRLAWS “The best business advice I ever received? Get a business coach.” Eric Schmidt, CEO, Google www.youtube.com/watch?v=yVfeezxmYcA “Where I think a business coach adds value is providing a space for business owners to step away from the business for a period of time, and focus on high-level issues. In addition to providing the space to do this, a coach also makes sure it happens despite whatever crisis happens to have arisen that day.” Wayne Davies
94 I hope this book has been useful in sharing some of the skills and techniques we have found to work in transforming owner-managed business. But this is just the start of what we strive to do for our clients. We work closely with business owners and management teams to turn these concepts into fully developed strategies tailored to the individual business. We transfer into the business the skills and methodologies needed to turn that strategy into an implemented reality. We support the client in using this knowledge and process to create the business they want to own. We call this business coaching. It’s about unblocking barriers to growth to ensure your business pays you richly in time and money. Founded in 1999 Shirlaws has now grown to include operations in North America, UK, Europe, Middle East, Australia and New Zealand. Our coaches take the many complex issues involved in running a business and help make them simple and easier to manage. We work alongside clients to guide their businesses to achieve long-term, profitable and sustainable business growth. What Shirlaws brings is a language and system for growing businesses and building internal capability. A language and system that gives our clients three simple things: more time, more money, and less stress. If you’d like to know more about us please take a look at www.shirlawscoaching.com and www.shirlawsonline.com I you have liked what you have read in this book do please get in touch. We are always happy to have a coffee and a chat with any business owner at no charge. We love business! Email: jrosling@shirlawscoaching.com
95 “We became a coaching client in November. Our revenues are up 31% in January, 24% in February. I wish we’d become a client three years ago. What a business we’d now have!” Rajan Amin, CEO Coversure. “The most transformational part of working with Shirlaws is the hands-on skill transfer into our business that generates additional profit.” Iain McMath, CEO Sodexo Pass UK
96 ABOUT THE AUTHOR John Rosling John Rosling is UK CEO of Shirlaws, the international business coaching organisation. John divides his time between that role and working with a small number of clients in the UK and across Europe helping their businesses to grow, and developing the skills and performance of their management teams. John started his career with Unilever in the UK and Japan before moving to Diageo as International Marketing Controller with development responsibility for 113 markets. Since leaving the corporate world he has established or acquired a number of small businesses in Carbon Responsibility, CRM, finance/asset management, e-commerce and business outsourcing. He retains an interest in a small number of these businesses. John is married with three children and lives in Hampshire.

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Ebookpreview

  • 1.
    VISIT US ATwww.shirlawscoaching.com More money More time Less stress The business owners’ guide to creating a profitable, sustainable business that rewards you richly in time and money John Rosling
  • 2.
    2 “Your motivation isnever money, money is only an end result. Your motivation is more likely freedom.” Simon Sinek Acknowledgments This book would not exist without the business insights and knowledge of Darren Shirlaw and the development team at Shirlaws, the international business performance and coaching organisation of which I am UK CEO. Darren is one of the world’s most highly regarded experts on what makes a mid-sized business succeed and what makes the owners and CEOs of these businesses achieve their goals and ambitions. Both as a business owner who has implemented Shirlaws’ principles in my own business and latterly as a member of the Shirlaws team, I am deeply indebted to Darren and all the partners and coaches at Shirlaws in the UK and all around the world. They are a remarkable group of people who change the lives of business owners every day. www.shirlawscoaching.com www.shirlawsonline.com
  • 3.
    3 In this book SECTION1: STEPPING UP TO A LEADERSHIP ROLE Chapter 1 - Understanding context Chapter 2 - Understanding the power of ‘why’ Chapter 3 - Understanding your role as leader Chapter 4 - Leadership in action - creating the why SECTION 2: UNDERSTANDING YOUR BUSINESS Chapter 5 - Understanding your business cycle Chapter 6 - Understanding risk in a strategic context Chapter 7 - Becoming a great communicator SECTION 3: CREATING REVENUE TODAY Chapter 8 - Product - the foundation of your business Chapter 9 - Your intellectual property - the rocket-fuel in your business Chapter 10 - Positioning - your key focus Chapter 11 - The salesforce that never asks to be paid Chapter 12 - Driving energy in relationships Chapter 13 - Creating revenue – A final thought SECTION 4: GETTING YOUR BUSINESS TO WORK FOR YOU Chapter 14 - The fully functional business Chapter 15 - Capacity planning - The secret of controlled profitable growth SECTION 5: BUILDING EQUITY VALUE AND EXITING YOUR BUSINESS Chapter 16 - What really drives equity value Chapter 17 - Leaving your business in good hands SECTION 6: MANAGING YOUR OWN ENERGY SECTION 7: ABOUT SHIRLAWS AND THE AUTHOR APPENDIX: THE RECESSION AND WHAT TO DO ABOUT IT The five mistakes of a recession The five growth opportunities of a recession The five ways to prepare for the recovery
  • 4.
    4 “There is moreto life than increasing its speed.” Mohandas K Gandhi
  • 5.
    5 Shirlaws works withhundreds of mid-sized, owner-managed businesses in 26 countries around the globe. Our job is to help business owners and CEOs to achieve success for their business. Our goal is to see our clients’ businesses reward them richly in wealth, time and fulfilment. Our clients own and run successful businesses. Yet the most common things we hear new clients say are “I want the business to work for me, not the other way round”, “I’m not making the money I want”, “I want less stress”, “I need to scale”, “I want to exit”. It is to address these issues that we have developed, over the last 12 years, knowledge, experience and unique business frameworks and techniques. The purpose of this book is to share this approach to business management with you. I hope this will help in getting your business to work for you (not the other way round). And to give you wealth and choice about how you spend your precious time into the future. Whilst we see hundreds of SME and owner-managed businesses, and every one thinks the issues they face are unique, what is remarkable is that almost all the blocks to a businesses’ progress can be traced back to a few key issues. My belief is that if you can address these “source” issues you can unblock almost any business to achieve its potential – and the dreams of those who founded and run the business. My intention in this short book is therefore to examine each of these source issues and offer some perspective on how we help businesses overcome them. In doing so I hope I can help give you some valuable insight and perspective on your own business. If you are interested in learning more about Shirlaws you’ll find more information about us in the back of this book. If you are interested in having a chat and a coffee, you’ll find my personal email address at the back of the book too. John Rosling Autumn 2010
  • 6.
    6 STEPPING UP TO ALEADERSHIP ROLE “There is no map. No map to be a leader.” Seth Godin
  • 7.
    7 CHAPTER 1: UNDERSTANDING CONTEXT “Themain thing is keeping the main thing the main thing.” German proverb As CEOs of small and medium sized businesses, most of us have had the experience of being so firmly embedded in the day to day issues of running the business that it is difficult to find sufficient time to grow the business. We can get stuck in the detail with the result that the single greatest impediment to the growth of our businesses and the realisation of our dreams can be ourselves. This is not a comment on skills or capabilities (although we could probably all do with constantly learning new skills) but it is a comment on what we choose to focus our time and energy upon. It is a comment on the belief we have created that we have to manage everything because no one will do it as well as we do. The challenge, if you ever want to have your business deliver the wealth and leisure you set out to achieve, may be to find a new way of working. A way of working that really successful entrepreneurs who have built vast and complex businesses - but still seem to have time for ballooning and boat racing - have learnt to do instinctively. You have to find a way of working that manages your business not in content but in context. Context is that which brings meaning. It provides a common language within the business process. It gives clarity to all the content and allows a business conversation to unfold, resulting in aligned decision making and understanding. Imagine a conversation between three directors of a business. Let’s imagine the discussion is about fruit; which is the best fruit between apples, bananas and oranges. Without any context to give meaning to the word “best”, imagine how long that conversation could last
  • 8.
    8 and how muchenergy, management time and focus it could use up. Now imagine the same conversation if a clear context of “Vitamin C” was agreed. How long would the conversational have to last? It is a simple analogy, but how many of us have the experience of management or team meetings where issues become muddled and decisions are difficult to reach. I find working with boards and teams that if they can set a clear context, decision making can be remarkably accelerated - and relationships improved. In fact, most problems in business stem from the fact that there is normally plenty of content, but no context. Context is the wood, content the trees. The context you choose to run your business, project or meeting is, of course, down to you and what you are seeking to achieve. As an example, we are working with a fast growing business that has chosen to work with a context of “learning”. Having this context supports decision making in how the business treats its people, takes decision, and invests money. The result is an ambitious and creative business where mistakes are not a cause for blame but for learning and where the team is motivated and productive. It’s also a great place to work. Context is one of the three key skills that all effective leaders have learnt. So how do you get context into your business? The first and primary piece of context in your business is called “why” and I’ll look at that in detail in the next Chapter. TOP TIPS • Learn the trick of the greatest entrepreneurs; manage in context and leave the content to your team.
  • 9.
    9 CHAPTER 2: UNDERSTANDING THEPOWER OF “WHY” “Knowing the why can inform your actions as a brand, your brand voice, its character, and everything else that helps build it into something people want to have a relationship with.” Simon Sinek When I took over as CEO of Shirlaws I was fortunate in that I inherited a well managed business. But it was one that had just lived through the worst recession in 80 years. The first thing I focussed on wasn’t revenues or internal cost structures – the content. My first priority was to refocus everyone in the business on their core belief in the busi- ness – the context. I reasoned that if this core belief was strong and shared by all, the commercial success of the business would follow. It would also be a fun place to be. Belief is context because belief in the why makes sense of the what. All business understand “how” they do what they do (their manufacture, sales, delivery, service, admin. etc.), and most (but not all) truly understand “what” they do (the funda- mental intellectual property and rocket juice that sits at the heart of the business, what makes them famous and what customers “buy” (rather than what they sell). But very few businesses really understand the “why”. Which is a pity because the “why” is where the power is.
  • 10.
    10 If you thinkabout all the most successful businesses, the ones people would most like to work for, they all have a strong and well understood “why” in their business. It’s this “why” that staff buy into figuratively - and customers buy into literally. Simon Sinek explains this brilliantly using Apple as an example. Apple understands why it exists in its bones and has invested huge amounts of time in instilling this belief in its staff. This “why” is distinct from “what” it does. Apple believes that everything they do challenges the status quo. It believes in solving problems for people through great design. Making and selling computers is just “what” it does. This fundamental belief in a “why” drives everything the business does – it creates the context for all the decisions the business makes. Go into any Apple store and you’ll see the outcome in a powerfully motivated staff who love working there and believe passionately in the product they sell and communicate that passionate belief to customers. Sinek draws the comparison with Dell, a company with a clear understanding of “what” it does but not “why” and shows how this limits Dell. Since Dell has a clear “what” (make and sell computers) and Apple has a clear why (solve problems through great design) customers will only buy comput- ers from Dell whilst they’ll buy computers, music and telecommunications from Apple. And they’ll make every purchase decision when buying Dell partly on price (since it’s a rational “what” choice) but price hardly features when buying Apple, which gives Apple a very healthy margin and a massive valuation. This is the power of position which I’ll cover in detail in Chapter 10). The key reason behind Apple’s success is that people buy values and beliefs over benefits. That applies to the customers you want to attract and the talent you want to Why What How
  • 11.
    11 employ and itis as true in the corporate and B2B market as it is in the SME and B2C markets. I’m sometimes asked why I joined Shirlaws when I already had a reasonably successful business and a comfortable life. I had had the experience of applying Shir- laws coaching in my own business and had seen the tremendous commercial return. But what attracted me was the strong “why” I saw in the organisation – the clear intent to help change the lives of business owners through coaching and the transfer of skills and knowledge. It doesn’t of course mean the “what” isn’t important. The quality, effectiveness, and value of what we supply and how we do it is vital - we all make rational (what) purchase decisions every day. It’s just that the “why” is often forgotten in the content-driven, busy world of the SME. And by forgetting it we are missing a major trick. Incidentally, there is a strong and compelling practical reason why people make most decisions in a why (values) rather than what (benefits) mode. To be simplistic our brains are effectively an evolutionary map of development – almost analogous to tree rings. The core or “limbic brain” (sometimes called the “crocodile brain”) was formed before the development of language and what we consider “rational thought”. It is in the limbic brain that “feelings” reside and key decisions are made. The outer layers (“neo-cortex”) are used for language, rational thought, processing etc. So, simplistically, relationship choices (with people and “brands”) are made at a “feeling”, pre-language level and then post-rationalised to satisfy our thinking mind. Clearly, this is highly simplified and everyone is different (which has spawned a whole industry from Jung to Myers Briggs and beyond - we’ll look at this in Chapter 7). But for us, as business owners, it is important to note that beliefs and values are vital for creat- ing effective and valuable customer and staff relationships – far more so than facts on websites, price promotions, or the prospect of pay bonuses (all of which could play a supporting “rational” role). As a bonus you’ll get a fun place to work and marketing and sales will be easy giving you spectacular revenues as well. We’ll look at how this impacts on buying behaviour – and most interestingly our ability to create effective referral networks in later Chapters. So if you want powerfully motivated staff who will take your business to where you want it to go, allowing you to stop “running” your business, you need to create fundamental belief in the “why” in your business.
  • 12.
    12 The “why” isabout vision and dreams and possibility – not about logical strategies. When Martin Luther King stood in front of a quarter of a million people on Washington Mall in August 1963 he didn’t say “I have a Plan”. So how do you create a “why” in your business? We’ll look at that in more detail in the next Chapter. CASE STUDY: APS When Brian Armstrong and I started APS (www.aps-advance.com) in 1998 in Australia & the UK it appeared to most that it was just another software company to provide prac- tice software around the individual business requirements of accounting and consulting firms. We had both worked in, and left, a more established organisation that was a toxic envi- ronment for employees and clients. We were clear that APS needed to prove that it was possible to build an ongoing and sustainable business in our chosen market place that was truly successful from both a cultural and commercial perspective. That was and is our “why”; the question we asked of ourselves and one which con- tinues to govern our business model today. To us, life is a journey not a destination so we continue to focus on the ‘why’ – as do our teams in the 3 countries in which we now operate – No one is perfect and to say that we have attained a 100% score and maintain it would not be truthful. It does however remain our Intent to never lose sight of this purpose. But for us it was not just the “why” part of the conversation – we also had to get clear about “what” we were going to do to achieve that and “how” we were going to execute it – both culturally and commercially. Culturally our strategy is quite simple – FAMILY – a context that binds core values, we recruit people who are aligned with these and want to be part of this structure. Similarly we form relationships with clients who want the same thing – to be a client not just a
  • 13.
    13 customer as isso often the case. Commercially our strategy is also simple – what we do is implement systems that give professional service firms the Information they need to serve their clients and to run their own business. Key to this outcome is developing and maintaining a sustainable Relationship. How we do that is through the provision of Software, its Implementation, ongoing Consulting, Support and regular software Upgrades. Fundamental to this provision of software and client service is the shared and agreed values that are part of our every day language & behaviour – internally and externally – to be Caring, Flexible, Open, Passionate, Safe, Honest – To have the 100% conversation within our team and with our clients. But, for us, understanding the “why” set the whole context and purpose for our busi- ness and enabled us to agree the “what” and “how” easily and with focus. These haven’t changed. Brian Coventry, CEO, APS. TOP TIPS • Find the fundamental “why” in your business - and create a strong sense of belief around it.
  • 14.
    14 CHAPTER 3: UNDERSTANDING YOURROLE AS LEADER “While Management is operationally focused, setting priorities, allocating resources, and directing the execution, Leadership is more forward thinking, more about enabling the organization, empowering individuals, developing the right people, thinking strategically about opportunities, and driving alignment.” Randy Komisar People who run businesses use various titles but you’ll have noticed I use the term Chief Executive or CEO. That’s because I believe it is your role is to be the Chief – to Lead and not to Manage. That’s why I prefer not to use the title “Managing Director”. If you want to grow your business and have it working for you and not the other way round your role should evolve so that you are not “managing” the business at all. In other words you live as much as possible in “why” and less in “what”; more in belief and less plan; in context not content. Therefore in my own business I am CEO not because it sounds grander but because it describes the role I do and how I want to see it develop.
  • 15.
    15 So what isthat role? At Shirlaws we believe that the role of the CEO of any business – including SMEs – can be described in three simple concepts: • Set the context • Manage the energy • Coach don’t play Set the context means it is your job to understand the “why” and know where you are going. You create the dream. It means you are “above” and often 6-12 months “ahead” of the business, allowing your team to run the today. It also means you hold the context so that every decision in the business is simple to make in a contextual not content- driven space. It means you understand where you are in your Life Cycle, understand and hold the business to the contextual choices you have made in terms of Risk, Mar- ket Position, Product etc. All these will be covered in later Chapters. Manage the energy means it is your job to create the belief in your why and create a compelling vision for your team. You sit above the business and your job is “feel” your business like an organism and know when things are not right. It is to support the en- ergy and enthusiasm of the team and the key relationships you have outside the busi- ness. I think about it like this. All employees in the business possess a certain amount of energy that can be devoted to progressing the business. If this energy is aligned and “flows” easily through the business there is a greater chance of success. Alternatively if the energy gets dissipated, for example in managing processes that are not working or where departmental heads have different contexts and hence work against each other, energy gets expended inside the business and is not channelled into activities that will result in the growth and success of the business. Coach don’t play means you’re not on the field any more. Your job is to build the con- fidence and skills of your team (over time) so that they have the ability, belief and are given the responsibility to play the game – you create the big picture and then support, observe, and encourage. You coach. That way your team runs the operations of the business and you get to grow the value and scale of the business. You’ll notice that none of these says “run the business” or “deliver the bottom line”. That’s because to have your business work for you, you will need, in time, your senior team to do these management tasks for you. In fact my whole theme so far (manag- ing in context, setting the why) has been about getting your business into the position where it is bigger than you and is not dependent on you. That means your role changes
  • 16.
    16 to the fascinatingand stimulating role of entrepreneur - and not manager. For many SME owners that may not seem possible right now but if you follow the ideas set out in this book I believe it will become possible. At any event you will have the choice of how much day to day management you want. CASE STUDY: YRM YRM (www.yrm.co.uk) is an architectural company with offices in London, Vienna and Bucharest. Established in 1944 YRM has completed over 800 design projects in 37 countries. YRM is renowned for high quality functional and durable design delivered to agreed budgets and timescales. John Clemow joined YRM in 1978 and leads the fourth generation of YRM’s leadership. “In mid 2007 as the economic storm was looming, I heard Peter Harford of Shirlaws speak at a seminar about sluggish leaderships, succession fall out, and underperforming businesses. It felt like I was the only person in the room, with a laser dot on my forehead. Our top table was an operationally circular partnership model and, as Managing Director, my role was mainly cleaning up the mess left behind by the owner-managers enjoying their own games. I recognized I was in the classic Managing Director position of being well and truly stuck in the content and I brought Peter in initially to coach the Board. We realized we needed to operate as a proper company Board, with a CEO supported by a business structure with defined functions, lines of communication and delegated decision making. I realized I needed to act differently if I was to be a genuine CEO, to take more of a leadership role; to be “in the context” as Peter would say! Peter helped me understand, implement and ultimately enjoy my CEO role. To get the leaders focused and on track, we needed to develop and crystallize our vision and strategy which was both motivating and enjoyable. This gave me a positive framework
  • 17.
    17 for dealing withsome difficult problems to reverse our trajectory. I selected emerging leaders to prepare strategies for some priority areas of the business. I saw my primary role in energizing and supporting these rising stars. Great work was done which continues on the next set of issues to tackle. Our conversations are mainly on how these strategies tie in to our vision and overarching strategy. It took two years of hard work to embed the changes in thinking, action and attitude. There is inevitably some occasional backsliding which means I have taken my eye off the ball. The panic and frustration that I and my colleagues felt has been replaced by calm determination and a clear sense of purpose. I wake up in the morning knowing what I need to do today and looking forward to the steps needed ahead. We have weathered the storm so far, and I only occasionally need to do a bit of light cleaning”. TOP TIPS • Set the context; manage the energy; coach don’t play
  • 18.
    93 ABOUT SHIRLAWS “The best businessadvice I ever received? Get a business coach.” Eric Schmidt, CEO, Google www.youtube.com/watch?v=yVfeezxmYcA “Where I think a business coach adds value is providing a space for business owners to step away from the business for a period of time, and focus on high-level issues. In addition to providing the space to do this, a coach also makes sure it happens despite whatever crisis happens to have arisen that day.” Wayne Davies
  • 19.
    94 I hope thisbook has been useful in sharing some of the skills and techniques we have found to work in transforming owner-managed business. But this is just the start of what we strive to do for our clients. We work closely with business owners and management teams to turn these concepts into fully developed strategies tailored to the individual business. We transfer into the business the skills and methodologies needed to turn that strategy into an implemented reality. We support the client in using this knowledge and process to create the business they want to own. We call this business coaching. It’s about unblocking barriers to growth to ensure your business pays you richly in time and money. Founded in 1999 Shirlaws has now grown to include operations in North America, UK, Europe, Middle East, Australia and New Zealand. Our coaches take the many complex issues involved in running a business and help make them simple and easier to manage. We work alongside clients to guide their businesses to achieve long-term, profitable and sustainable business growth. What Shirlaws brings is a language and system for growing businesses and building internal capability. A language and system that gives our clients three simple things: more time, more money, and less stress. If you’d like to know more about us please take a look at www.shirlawscoaching.com and www.shirlawsonline.com I you have liked what you have read in this book do please get in touch. We are always happy to have a coffee and a chat with any business owner at no charge. We love business! Email: jrosling@shirlawscoaching.com
  • 20.
    95 “We became acoaching client in November. Our revenues are up 31% in January, 24% in February. I wish we’d become a client three years ago. What a business we’d now have!” Rajan Amin, CEO Coversure. “The most transformational part of working with Shirlaws is the hands-on skill transfer into our business that generates additional profit.” Iain McMath, CEO Sodexo Pass UK
  • 21.
    96 ABOUT THE AUTHOR John Rosling JohnRosling is UK CEO of Shirlaws, the international business coaching organisation. John divides his time between that role and working with a small number of clients in the UK and across Europe helping their businesses to grow, and developing the skills and performance of their management teams. John started his career with Unilever in the UK and Japan before moving to Diageo as International Marketing Controller with development responsibility for 113 markets. Since leaving the corporate world he has established or acquired a number of small businesses in Carbon Responsibility, CRM, finance/asset management, e-commerce and business outsourcing. He retains an interest in a small number of these businesses. John is married with three children and lives in Hampshire.