S1E7 Key to Success in Business

Business success is built on a relatively few key foundations that underpin the myriad of actions that are required for success.  This episode introduces the 3 fundamental keys of Strategy, Structure, and Culture that every CEO and their leadership team must focus on to acheive success for their organisations, their stakeholders, and themselves.

For more information relating to the podcast and how you can gain access to advisory services to assist you with your business, see www.lseconsulting.net.au

Transcript

CEO Thinking Episode 7
 Key to Success in Business

20 March 2024

Transcript

Welcome to the CEO Thinking podcast. I'm Philip Belcher, a successful CEO and CEO mentor, advisor, and business consultant. 

On this podcast, I provide insights to inspire ideas for CEOs, directors, and senior managers to use as they lead their businesses to achieve outstanding results.  I've applied these ideas to start, grow, turn around, and successfully exit businesses as well as to mentor my clients that have achieved great results. 

I regularly host eminent special guests who share their experiences and ideas to inspire CEO thinking...If my guests and I can use these ideas successfully, you can use them too.

This week, we're going to be looking at key areas in business, that no matter what size your business is, need to be taken care of. 

So I've titled this: “Key to success in business”

It's essentially going to cover points that are in an article that I will refer you to, and I'll refer it to you up front, out of the Harvard Business Review. So if you go to the hbr.org page and type in “What really works”, you'll find an article that was written by three authors; 3 researchers and three luminaries in this area called Nora, Joyce, and Robertson (that's their surnames). 

It doesn't matter what size business you are in, there are certain things that you have to take care of in the business. They found, through their research, that there were eight key areas, four of which were essential, and any two of the other four were necessary. 

So, in general they found that for businesses that were successful, there were the four key areas that were covered and then the businesses that they researched had taken, and paid attention to, two out of the other four. 

So what are those key areas that they found and said really were? 

The four key areas, the four basic areas that they say you have to pay attention to are:

Strategy, Structure, Culture and Execution.

And execution Meaning doing what it is that are in those other three areas.

Then the four secondary areas with Talent, Leadership, Innovation, and Mergers and Partnerships. 

So those organisations covered those first four strategy. structure, culture, execution and then paid attention to any one of the other four,

I want to position with you that my experience is, having gone everywhere from running my own one-man show through to running various parts of multinational companies, is you really need to pay attention to all of the eight with emphasis on the first four. But you can't afford to ignore the second four. 

But sticking to the way that we do things on this programme, I'm going to cover three key areas. That is strategy, structure, and culture. 

So let's get into strategy. 

Strategy is one of those words that gets thrown around the place, but not too many people really focus on what it is and what it means to their business. Strategy really means ‘plan’ whilst it gets a whole lot of perspectives placed around it; mystification, etcetera. It means having a plan. It is derived from military use, and it is used in areas where you have to take a whole lot of things into consideration. 

Let's talk about the things that you would take into consideration. Now. I keep reinforcing the fact here, it doesn't matter how big or small your business is, these points apply. 

So first of all, if you're going to build a strategy, and I highly recommend that you do and write it down. I have mentioned before that it's imperative you have a business plan. Preferably in writing, so if you're going to build a strategy, the first thing you need to do is to decide what the mission is that you're going to achieve, then around that set, clear goals. I consult and talk to many businesspeople and I asked them at times. “So what are you planning on achieving here?” And I do quite often get uneasy silences because they can't straight off the top of their head say this is the goal that we're aiming at right now or this is the goal we're aiming this business toward. 

So have a mission. What is it overall that you're going to do, then set clear goals. 

Once you've got those goals you've decided you're going to achieve, there are two areas that you need to look at for your business. You need to look at what you've actually got internally. 

What is it that you've got that from your strengths? What is it you're going to apply to the marketplace, whether it's you in your one person show or whether it's you in your corporation? 

What are the strengths of the of the business you've got internally, but then also what is it that you could do better? Often known as weaknesses, I prefer to think of them as areas of improvement, or areas that you will choose to avoid. So what are the strengths that you've got to offer, and. what are the areas that you need to consider or avoid going into those areas? 

So once you've looked internally, then look externally. What is it that you're going to have to address out there? 

What are the opportunities that you're aiming at? Where is it that you can find, and we've spoken in other programmes, we're talking about, choose your customers and choose a segment of that customer market. What is it out there that gives you the best opportunity? The opportunities for you to apply your strengths where your weaknesses won't get in your way. 

But then once you identify that, what is it that is going to get in your way? What are the threats? What is it that you will need to overcome or address or work a way of working around? 

So, once you've addressed, once you've looked at this, these strengths and weaknesses from the internal perspective, and looked then at the external perspectives, then you can come up with a plan of action, and a distinct plan of action that you're going to take on. You assess what is the best course of approach. You wrote it down in your plan, which then becomes your strategy that you then adjust as you begin to implement using one of the other points in these key areas here. 

Just to summarise this area of Strategy. It's a plan. It's a plan that takes into account where you want to go in the future, in the present, near term, and longer term, what you've decided is your target. Then what you've actually got to take and address those areas, but also having a look externally to say what is it that I'll have to overcome and how will I prevail so that I achieve my goals. 

If you're a sole trader, it could be that you're planning on going out on your own with aspirations of building a substantial painting business. So, you decide that you're going to be a house painter. Now your goals may be that you want a triple bottom line, a strong income with a good work-life balance. You want community recognition for your excellence, and you want to be environmentally sustainable. 

So there is a lot of substantial competition out there, but there's strong demand for quality painters, so your experience and skill will come into being because no doubt, if you're going to go out there, you're good at doing that. 

So you have the required skills to be a painter, but then you're going to have to also be good at marketing and sales and you're going to have to be able to promote your business. But once you get out there, you're also going to have to recognise that there will be others that will be going after the same area that you're going after, so you'll need to come up, in your strategy, with a way of addressing these things. So you take action, you work out what your advertising is going to be, you work out if you need something like a web page. Etcetera.

And then you go about getting out there, promoting your business, doing a good job, asking for referrals, etcetera, and effectively engaging with your customers, using the appropriate marketing and sales techniques. But I want to highlight, you then need to have a look back after you've been operating for a small period of time and say “Is this working and do I need to adjust?” so that you keep your strategy in place with what's going on and what you've experienced.

If you're a company, you'll go through a similar process, but it'll be much larger. You'll look at where you can take the products and services that you've got, what your team is, you look at your capabilities. Then you'll look at your competitors, but you'll probably have more in the way of research on your competitors than you might as a small business. You take those into account. You segment your marketplace and then you go after the key areas, making sure that you've got your team understanding exactly what the strategy is and what they need to do in support of that strategy. 

Once again, doesn't matter how small or large you are, you then look at, once you start to implement, you look at your strategy and make sure that you keep tailoring it as you find out what's going-on on your way through. 

So, strategy. It's a plan. It's a well-conceived and thought through plan. It looks at your internal capabilities and your external factors that you'll have to take into account. It then requires you to implement it and keep it fresh and current based on the experiences that you've got. 

OK, so that's the. first point in key areas. So we've talked about strategy. 

These next two points are extremely important, that again, I find it somewhat difficult to understand why they don't have more emphasis in a lot of the businesses and companies that I talk to. 

So, the next one is Structure. So, structure: how does structure apply to someone who's got a small business, maybe one or two people, or how does it apply to a sole trader? We all think about structures and look at big organisations where they've got boards of directors and CEO's, you name it, they’ve got a ‘C’ for everything, Chief Everything. We've got, Chief Security Officer or we've got Chief Whatever. So yes, they've got structure. 

But let's think about structure more for a moment. If you're going to have any business at all, it will need to work in a way that is structured. If you're a one-person business, as I have been, what you find is there are certain things in a business that you have to pay attention to even although when you delegate, you're actually looking yourself in the mirror. 

So yes, there's a need in every business for someone that's going to lead the charge. This is the CEO, this is, the executive team. 

Then you're going to need marketing. They've got to work out what it is out there that you're going to present to the market and who in the market you're going to present it to that will make your business viable. 

You've got to have a sales function, and we will talk more in later episodes about sales because it is really important. If there is no transaction, if someone doesn't make a sale, no matter what the business is, then there's no reason for it, and even in a not-for-profit, not ‘even’, especially in a not-for-profit, you've got to make sure that you're satisfying the people that are your constituency. That is in essence a sales function. 

You need finance and administration. You have to make sure that whatever the business is, it's viable. 

You need human resources, even for yourself. Are you taking training? Are you learning what you need to learn? Are you taking care of yourself? Are you taking the appropriate time off? You need human resource management, even if it is for yourself. Pay very close attention to that, particularly you hard working sole traders out there. 

You need operations and delivery. Someone's got to do whatever it is. If you're running your own retail shop, you're going to have to work out what you're going to do to make sure that you're staffing the shop appropriately.

Customer support. Customers take on the services of your organisation. How are you going to support them? What are you going to do once they've taken on your service or once they've bought your product? How do they come back to you if they need any after sales service? 

And then of course you need what's called governance, which is one of those wonderful terms that gets thrown around a lot, generally allocated to the board of directors. But really what it boils down to is owner representation. Now, owner representation when you are on your own or in a small business, you are the owner or if you're in a small business, you probably work alongside the owners. And really what this governance thing says is, is the organisation doing the right things to make sure that the owners and the stakeholders in the business are being well taken care of. 

So structure is extremely important and when you write your strategy it is then important to write down your structure. Now all of those areas I covered, the leadership, the executive team, marketing, sales, finance, admin, HR operations, customer support, governance, and a few other areas there like ICT (information and communication technology) has to be taken care of. Then it's important to work out that if it is just you, how are you going to manage your time and allocate it appropriately so that each of those areas of your business are being taken care of. 

So, structure, make sure that you have written down somewhere a structure for your business that has against it, the initials or the names of who's going to take care of that, what they're responsible for, and if it's just you, put your initials in each one of them, but make sure that you can look at each one of them and say “I've got that covered or I employ someone or contract someone to take care of those things for me”, but make sure you've got it well covered. After all, that part of governance, if it is your business, then you need to know and make sure that it's serving you and serving you well. So that's structure.

So, we've got strategy, we've got structure, so I'm going to move on to the third point which relates quite closely to the structure and that one is the Culture of your business. And the culture of your business is very important, again, whether you're a sole trader or whether you're a major organisation or somewhere in between. 

So, what's culture really boiled down to, well, culture is the part of the business that is as if. it's the personality of the business. It's intangible, but you know when you walk into a business or deal with someone, that there is definitely a feel about the way things go on here. 

You can walk into a retail premises, and you're greeted by someone who's friendly, someone who wants to provide service, so you go “Ohh, this is a friendly place. I actually like doing business. I feel good here”. Or you can walk into, perhaps an automotive workshop, where no one pays attention to you, and really once they get around to talking to you, you feel as if you're in their way. 

Now as an individual, if it's just your business, how do you come across with your cultural perspective and how do your customers feel about the way that you do things. 

So, every business needs to have a vision. Where is this place going to go? What's it going to do? So write down whatever it is that is the vision for this business. If you're working for a multinational company, there will be one, but have a look at it and see how it applies in your organisation. What's the purpose? What does it really care about? What are the values in the organisation? What are your values in your business that you're taking to the marketplace? 

A little bit of it comes from the company history and the people who started it and why they started it, so pay attention to the company history because if there are people that you're dealing with now who have done business with the company over the years, they will have a perception of what the culture of the organisation is, even although they won't be able to articulate it they'll have a feel for the way the business works. 

Have a look at the things around your business that are seen as somewhat icons, seen as things to look up to. I was doing a consulting assignment at one stage, to talk to an organisation about improving their results. I walked all the way through the office. I had to get to the back, to the CEO's office with a closed door. I went in. He closed the door again and all around the office were model high-performance cars. Right away, I had a feeling for the culture of that organisation, which was, the CEO sees themselves as somewhat aloof behind closed doors and wants to perpetrate fast cars and a very male dominated environment. 

Now that was just me walking in ‘cold’ and getting that impression. Interestingly, when I went and did more work with that organisation, I found that what I saw in that office was pretty much the culture that was being perpetrated. Whether it worked or not is another thing, I won't go into that right now, but be aware that the things that you, as the business owner or the business leaders, perpetrate as your symbols of where you think are important, that will have a big impact on the culture of the company. 

The next thing you also have to look at with regards to culture is what are the processes in your organisation for dealing with any deviation from the culture that you're trying to implement through the place, and that you want to have your customers identify with and hold in esteem that helps you be differentiated in your marketplace that attracts customers to you. 

Do you want to have a culture where you know that your target market says “I really want to be around these people? I can't quite put my finger on it, but there is...” Or is there a culture there that says, “Well, I’ve got to do business with them, but it's not necessarily something that I want to do, but I might have to” or worse “Well, I really don't like doing business with those people. I can't quite put my finger on it, but I just don't feel that I relate to them”. 

So culture can be extremely important and there are many, many more facets to it that we won't go into just for the sake of time, but be aware that putting these three key areas together is a way of you driving your business, whether it's small, not-for-profit, for-profit or large, driving it to success and in a way being able to differentiate yourself so:

#1 have you got your strategy very clear, and have you written it down? 

#2 is the structure appropriate, and if it's not appropriate, what are you going to do about having a structure that works? If you are a sole trader or you have a small organisation and you feel there are areas that your business is not able to address properly, can you outsource some of that; can you bring in external advice that will help you address some of those areas? 

#3 with your culture, it is intangible. It's not something that is easy to quantify and yet as individuals, human beings, and customers, we know when we're dealing with an organisation with a culture that we respect and want to do business with, we also know very well whether it has a culture that we don't want to do business with. 

So those three areas, out of those eight, and in later programmes we will talk about them. Those three areas of - strategy, structure, and culture, are key areas that I encourage you to consider for your business. 

Thanks for joining me for this episode of the CEO Thinking Podcast. 

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I'm Philip Belcher and I'll look forward to talking to you in the next episode.