People challenges impact your happiness and can be either a source of energy or an emotional drain. People issues can include conflicts with a partner, a customer with too large a piece of your business, a supplier delaying your success, or a key employee or two that’s disrupting the rest of the organization’s effectiveness.. Or you might simply lack enough employees to serve your customers, though we caution executives to avoid tossing more employees at problems.
Until you settle these people issues, they’ll continue to consume a tremendous amount of emotional energy, making it difficult to focus on the other three main decisions.
How do you know you need to make changes on the people part of the business, as you scale up your venture? Here are four powerful questions to ask yourself:
The solution is to focus on getting the right people doing the right things with clear accountabilities and metrics.
These right people are called A Players. They are defined as:
You win with people; and you cannot win with average people. Therefore, how can you expect your employees to be extraordinary and differentiate the company if you use the same hiring and training methods as your competitors?
Are you ready to upgrade your team to A Players?
Strategy challenges are indicated by a slowing down in top-line revenue growth. If revenue is not growing as quickly as you like, then it’s time to re-examine your strategy i.e. what you’re selling to whom. It’s important to have a concise articulation of that strategy so you can get everyone aligned and on the same page without wasting sales or operational energies on activities not useful to the business. Jim Collins, author of Good to Great, calls this precisely articulated strategy a company’s “hedgehog.” Others call it a unique selling proposition (USP), differential advantage, or brand promise. Whatever you choose to call it, you know you’ve nailed it if revenues are growing as rapidly as you want. Turbulent economic times tend to expose weak strategies which are why we’re seeing many companies re-examining their business models.
Here are the indicators that you have a winning strategy:
Therefore, you know you have a great strategy in place when you are outpacing your industry in terms of both growth and profitability. When you nail your strategy top-line revenue growth and fat margins come almost effortlessly. In other words, these factors are largely on autopilot and they don’t keep you up at night. As you might expect, having the luxury to not worry about these factors puts your business in rarified air. The truth is most businesses do have to worry about growth and profitability because they do not have a differentiated strategy from their competition that is deeply relevant to your customer. In other words, you are largely a commodity who competes on price.
Here are key strategic questions that must have strong answers in order to win in the marketplace:
When you have a winning strategy, everything falls into place. Without one, you are destined to struggle. Strategy is serious work that needs the guidance of a trusted partner. It’s a job for professionals, not amateurs.
Are you ready to develop an industry dominating strategy?
Execution challenges surface when your increasing revenues are not generating increasing profits. Many firms triple their revenue, because they have capitalized on a differential advantage, only to see their profitability drop because of the sloppiness of their execution.
The other indication of poor execution is pure hours spent delivering your products or services. When execution is haphazard, the organization has to rely on the “heroics” of their people– putting in incredible hours to just keep the wheels from falling off the organization. By simply tightening up your execution habits, you can dramatically improve gross margins and profitability while reducing the time it takes for everyone to complete their work.
Here are the key questions to ask yourself regarding execution at your firm:
Scaling Up has a list of ten disciplines called the Rockefeller Habits Checklist™ that will reduce by up to 90% the time it takes you to manage the business, freeing up your leadership to spend more time on market-facing activities. These habits have been used by well over 40,000 businesses to scale their companies to new heights of revenue and profitability.
Fundamental to mastering the Rockefeller Habits is literally getting your entire management team “on the same page.” Scaling Up invented the famous One Page Strategic Plan. Today, the Scaling Up One Page Strategic Plan has evolved into a world-class online strategic planning and execution platform that allows every management member on the team to both contribute and access the strategic execution plan simultaneously and from any device. This online process and platform literally becomes the Management Operating System for your business–making accountability and execution far easier by transforming the invisible into the visible!
Are you ready for a more strategic, aligned and accountable process that drives results?
Revenue is vanity, profit is sanity and cash is king. Cash is the oxygen that fuels growth. The first law of entrepreneurial gravity is “Growth Sucks Cash.” We encourage companies to calculate their Cash Conversion Cycle (CCC) which measures companywide in days how long it takes between when you spend a dollar (marketing, design, rent, wages, etc.) until you get that dollar back.
In the early days of Dell Computer, the CCC was running 63 days and caused Michael to almost run out of cash. By focusing on decreasing this cycle, today they are running close to minus 35 days. This means they generate more cash the faster they grow, which is why they have over $9 billion in the bank, up from $6 billion when they got in trouble. We believe all growth firms can accomplish this or at least dramatically improve their CCC giving them sufficient internal cash to fuel their growth.
Here are the key questions to ask yourself to improve your profits and cash flow:
The Scaling Up Cash software tool outlines the cash cycle as well as reconciling profits to cash flow and develops concrete strategies to double operating cash flow in the next twelve months. This powerful tool will be used with your coach to identify the 7 key financial levers to additional profitability and cash flow while simultaneously calculating the growth in valuation of your business.
Are you ready for more profits and cash flow in your business?
Ajay is the only certified Scaling Up Coach based in India & he brings a wealth of 33 years of experience starting, building & growing businesses globally.