Process Improvement

For business owners, when you started up your company you most likely thought through why you were in business and what you wanted from it.  That is, what is the purpose of the business? The same basic question makes sense for you personally.  What is your lifes’ purpose … What is your personal purpose?

Many people seem to ignore this core question.  I am reminded of my favorite novella written by Richard Bach entitled Jonathan Livingston Seagull.  This seagull had a personal purpose wanting to fly higher and faster than his brethren seagulls; he loved to fly. The flock concentrated on eating, searching for crumbs on the beach in a competitive frenzy only to wake up the next day and do the same thing all over again.

They floated through life.  Jonathan Livingston Seagull made a difference as he taught others there is more to life than just surviving. If you find yourself, floating through life take some time to think through your personal purpose. Do you want to fly high?

Here are some thoughts to help you along in discovering and empowering yourself with a personal purpose.

Be/Do/Have

Monte Pendleton, one of the founders of the Silver Fox Advisors, wrote a piece on The Unlimited Power of the Personal Purpose. He says,” Man’s normal approach to life is reversed into ‘Do/Have/Be.’  It begins with doing instead of being, e.g., do your homework, then you’ll have an education, and then you’ll be a doctor. 

This approach misleads us into thinking that it is what we do that makes the most difference.” … “The truth is, the real difference we make in life is made, not by what we do, but by expressing who we already are (be). We already are magnificent.  We are a unique combination of virtues and qualities that have prepared us for a special task in life, to be on purpose in our world.”…

“You will love being ‘on purpose’ because it gives you permission to be exactly who you’d love to be, do what you would love to do, and have what you would love to have.” 

To zero in on what you want to be, you must prioritize what you love most. Monte suggests there are eight key life facets that you need to rank and force fit against the other. 

Here are the eight factors: career, family, financial, mental, physical, relationships, spiritual, serving.  With this ranking, then you focus on what you would love to be expressing with each.  For example: With my family, I would love to be expressing ____.  After a few iterations and a lot of discernment, your personal purpose tends to unfold.

Not unlike a business, Monte advocates you then develop your personal vision that is your dream of what you would love to Have or Have Accomplished at some point in the future. You go back to the eight factors and complete the sentences for each such as in my career, I would love to Have or Have Accomplished ____.  Then you set goals to do and achieve what you want to have.

There are many ways to explore and  develop your personal purpose statement.  Just search the internet and you will see. The concept is not new.  For example, the Japanese for centuries have been practicing ikigai, which fundamentally means a reason to live. 

In essence, what is the purpose of your life?  Ikigai has four components:  Passion—Do what you love; Profession—Do what you are good at; Mission-Do what the world needs; Vocation—Do what you can be paid for.  If this wholistic approach interest you, take a read of ikigai: The Japanese Secret to a Long and Happy Life by Hector Garcia Puigcerver and Francesc Miralles.

McKinsey’s Take on Personal Purpose

Recently, I came across an article from McKinsey & Co. entitled Do you know your life’s purpose? They suggest that life’s meaning comes from some combination of your values.

In their study, these are the values measured: achievement, conservation, caring, freedom, respect, tradition, enjoyment, stability, and equality/justice.  What I found interesting is that they uncovered three common patterns based on these values: free spirit, achiever, and care giver. 

That makes sense to me having always been achievement-focused wanting to contribute as much as possible in my short time on earth.  At this point, in my business role, the contribution is to help others become better leaders and successful in their business because a Leader’s impact has a multiplicative factor.

Uncovering your personal purpose does take some deep thinking and personal reflection on your part.  Many of the Silver Fox Advisors (SilverFox.org) can coach you through the process that Pendleton recommends.  Is it worth the effort as Monte Pendleton proclaims?

What is the benefit?

In terms of benefit, I like Steve Taylor’s post in Psychology Today back in 2013 on The Power of Purpose which he felt was rather basic to leading a healthy life. First, he says that purpose causes us to look outward and less focused on our worries and anxieties.

McKinsey found that “People who have a strong sense of purpose tend to be more resilient and exhibit better recovery from negative events.” This is an exceptionally good thing in the middle of a pandemic crisis.

A corollary to looking outward is that we feel part of something bigger and less self-centered.  Taylor also describes the notion of flow, “the state of intense absorption in which we forget our surroundings and ourselves.” A strong sense of purpose brings more flow and the happier one becomes.  

I think that is obvious but a key benefit. And, when we follow our priorities of what we want to be, that leads to do and then have, we move into our comfort zone that increases our self-esteem and confidence.  Finally, he suggests having this direction and goals leads to hope.  There is a reason to live the next day.

Self-Development

My approach to personal purpose centers on self-development based on what you want to be.  For me, people can get a little tied up with eight or ten different criteria to evaluate their priorities. It seems to me there are really three basic macro areas: career development, personal development, and social development.

Under career development, I ask people to rank the following on what is most important to them and why:               

1) type of career (small to large company),

2) type of industry,

3) type of role,

4) financial livelihood, and

5) work environment.

This is generally done easily and varies considerably among clients. 

With personal, I ask them to again rank describing what is most important to them and why:                                                 

1) mental,

2) physical, and

3) spiritual. 

Again, there is little problem in general for people to rank these.

Finally, under social development falls

1) family,

2) friends, and

3) community.

Sometimes people ask to break out church from community. Often family comes to the top.

With each of these subsets of the macro areas prioritized, the real determinant of personal purpose begins. I ask them to rank the top prioritized item from each macro area against the other areas. 

In other words, does career development, personal development or social development have the top-ranking priority? We keep matching across the macro areas the top-ranking items until the list of priorities is complete.

To help people through this process, these type questions are interspersed: where are your passions? what excites you to talk about? what makes you feel good when doing it?

My clients are generally business owners or small company CEOs.  Thus, we morph what is going on in the business to their personal purpose map from the above development areas. This normally is eye opening.

In this regard, I usually introduce the COP model by Zener and Folkman from their book The Extraordinary Leader: Turning Good Managers into Great Leaders. It has some similarities to ikigai. Visualize three concentric circles overlapping like a triangle. One is based on your competencies, one on your passions, and one on organizational needs.  Where these three circles overlap, they call that the leadership sweet spot. It can be insightful on where to spend your time and effort within the business. This is similar to ikigai.

The Four “Inner” Ps

Personal purpose is one of the four “inner” Ps that I will discuss in an upcoming blog on my leadership model. An earlier blog on September 15, 2020 described The 3 Ps of Leadership (People, Planning, and Performance) that relate to your “outside world.”

I think it is crucial for a leader to have a strong sense of their purpose.  Being willing to share that with your people can excite them as they see your excitement.  It also leads to coaching to find out what their personal purpose is that helps create bonding and trust between you.

Small Businesses:  Understanding your pathway forward

When I taught corporate strategy at the University of Houston, publishers would send me Strategic Management books by their authors hoping they would be used in my classroom. 

For the most part, these were all very thick tomes with an assortment of large company case studies.  This was worthwhile for students wishing to pursue executive careers in large enterprises. 

However, as my focus shifted to advising small company entrepreneurs, these books were not something I could recommend to clients even though the concepts were very worthwhile.

Entrepreneurial Operating System (EOS)

Then, I was introduced to a book by Gino Wickman entitled Traction: Get a Grip on your Business.  It is specifically geared for small businesses.  Wickman has thoughtfully integrated the planning concepts espoused in Strategic Management books in a straightforward and thoughtful manner for the small business owner. 

It is very digestible and takes a wholistic systemic approach.  I have recommended this book to my clients and members of the Silver Fox Advisors’ CEO roundtables.

4 Stage Growth Model for Small Businesses

Clients have found it very worthwhile, but continue to ask the question of” What does the pathway forward look like for a small business?” Said another way, “Where am I at in trying to grow my business into a successful enterprise and what comes next?”

These questions plus work on developing a new approach for the Silver Fox Advisors’ CEO Roundtable led me to develop a 4 Stage Growth Model for Small Businesses. 

In this blog, we will look at the 4 stages with a high-level sketch.  In future blogs, we will examine in more depth the different stages and how the model can help guide you forward.  This is not a researched base model but rather a combination of my business experience, education, teaching, and advising small business clients.

Development Phase

When a business is in the early stage, revenues are not robust. Achieving a million dollars is often a goal. Cash is king and everything if focused on getting customers and limiting expenditures. The offering is the owner’s idea without a lot of customer validation.  Processes are not well defined and often ad hoc. Planning is sketchy at best and words like leadership are somewhat of a distraction.    In general, the time horizon is noticeably short with firefighting on a day to day basis.

Growth Phase

Owner(s) are getting excited about organization success.  Traction with new customers or expanding activities with current customers is generating a growing revenue base.  Typically, revenues run above one million and below ten million. 

The organization is approaching a going concern where the owner is less critical to survival and growth.  Revenues are providing cash to invest in the business and improve operability and to compete more effectively for new business.  Loss of key customers can prove devastating.

There is a fair amount of activity on generating new ideas for products/services/customers and more sophisticated approaches to attracting customers through marketing. Still planning is heavily oriented towards current year.  Planning still may be rather ad hoc lacking strategic focus synchronized with tactical game plans.  Planning framework including mission, vision, objectives, value propositions, target markets, strategic themes, competitor analysis, goal cascading, accountability, and so forth are often lacking.  Effort does not seem to match current rewards for many with the focus still on the here and now.

Other key players beyond the owner have evolved and perform critical roles.  Often, these players interact more, and teamwork is emerging.  Organization structure is still somewhat loose with not overly formal role definition. The size of the organization varies based on the nature of the product or service provided.  Often staff exceeds ten and but generally does not exceed fifty and almost always less than one hundred.  Contractors are used to avoid adding staff in many cases.  People can perform multiples functions.

Processes have emerged and there is a level of documentation and sometimes training.  Processes are often changing and adapting as more effective functioning progresses and customer feedback requires modifications to be made.

Local market continues to dominate customer base in most cases.  Customer loyalty has emerged and identified as key customers with a retention focus.  Expenditures for sales and marketing have expanded significantly. Often there are some dedicated people to sales beyond owner and budgets for improved web sites, marketing collateral, and marketing campaigns.

Owner and key players are beginning to think about how to motivate and retain employees. Decision making processes are receiving some scrutiny.  Delegation has emerged where owner feels comfortable with key players carrying out more defined roles.  Level of participation in decision making varies but generally still well controlled by owner.

“Take Off” Phase

Customers are pulling business into extended and new offerings.  Revenue generation feels robust giving confidence to be more aggressive in investing and taking business activities to next level. As revenues trend towards ten million the excitement begins that the business could be much bigger.  This phase generally drives the business through doubling of sales approaching $20 to $25 million.

Organization has become a going concern and largely self-sustaining if owner were to disengage.  Thus, business also become sellable for potential multiples of revenue depending on growth rate of revenue and profitability.  Owners consider acquiring competition to expand current market or move into new markets.

Leadership team recognizes that making this leap forward requires much more sophisticated planning.  Planning exercises with key staff and down deeper in the organization occur.  Outside consulting assistance can occur with business plans developed and EOS type structures implemented. Current year still receives the greatest focus, but plans can extend out 2 to 3 years and occasionally to five + years particularly where new geographic markets are being pursued.

Organization has matured with more structure on roles and responsibilities. Delegation has taken shape. Developing staff for further growth is an agenda item as is how to acquire more of the right people to help drive the organization forward.  Often a human resource manager or responsibility is defined.  Owner will not always get involved in hiring lower level staff, but still heavily engage in getting the right team in place.  Management team is generally defined and often have team meetings.  Decision making generally becomes more participative.  Again, the size of the staff will vary depending on product and services offered but generally greater than twenty and may approach or exceed one hundred.

Operational and organizational processes are often seen as a competitive advantage as they have become fine-tuned for offerings.  Focus centers on developing capabilities that beat the competition. Accountability around the processes has become an important aspect of daily operations. Often computer system applications play an integral role with key processes.

Strategic account management for key customers has generally emerged.  Much greater understanding of competitors and their strengths and vulnerabilities.  These insights are often brought together to pursue new markets whether geographical or enhanced/new offerings.

The owner now typically sees their role as leader and that developing their leadership further will be key to breaking out.  They begin reading books on leadership and exploring support to improve their leadership and often that of their team. They begin to assess leadership of their key players.

Expansion Phase

Organization has matured to stage where planning systems have been implemented and natural ongoing routine with a comprehensive framework, guidelines, meetings, and so forth.  Accountability clear with target objectives and follow up for business units and individuals.

Revenues are significant exceeding twenty to twenty-five million but still with clear upside through organic growth and acquisitions. Sustainability is no longer an issue.  Company is fully functioning with vibrancy and robustness. Raising money for expansion can impact growth rate.

Generally, there are clear roles and responsibilities with multiple organizational levels.  Human resource manager/group is an ongoing function managing competitive salary and benefit offerings as well as performance management systems.  Management team is clear with defined accountabilities.  May have a board of directors or board of advisors. As with other phases, size of organization dependent on products and services however staff levels may be several hundred. Empowerment begins to emerge as a discussion topic. Values are generally well defined and seen as key to organization’s culture.

Almost always the processes are well defined and considered key to success.  As expansion occurs through mergers or strong organic growth, processes may need a revamp. Often more sophisticated computer application systems are installed for some key activities. Processes are generally considered owned by the function or management of the area.

Generally, the company has already moved into new markets from the original conception at the Development Phase.  Sales and marketing activities have matured in Take Off phase and often require revamp to drive further growth with greater sophistication.  The organization expects to move into new opportunity areas often into new geographies as local market’s growth may have played out but are highly leverageable for new entry. Markets and customers are well defined. Often company has developed a go to market strategy.

Value proposition seen as multi-dimensional. Company excels on various dimensions such as product leadership, operational excellence, and customer intimacy with one chosen as the lead theme. 

The organization begins to evaluate the quality of leadership.  Informal groups have emerged and can begin to counterbalance management team objectives. New levels of leadership sophistication become important to an organization’s success.

Contributed by Lane Sloan, former Shell CFO and Silver Fox Advisor.