Building an Enduring Business ➡️ Navigating the Landscape of Value Driven Strategy
Posted on 21st November 2023 at 17:16
In today's fast-paced business landscape, the word 'Money' often takes centre stage. But what if we take a step back and realize that money, while important, is not the end game? Instead, let's pivot our focus to the importance of strategy, specifically designing your business around enduring value. Drawing inspiration from Kevin Brent's "Entrepreneurial ScaleUp System" (ESUS), let's explore this fresh perspective to shift from a transactional mindset to a transformative one. 🌱
The Leadership Lens
First things first, leadership isn't just about calling the shots. According to Jim Collins, leadership is "the art of getting people to want to do what must be done." This definition urges us to go beyond the conventional models of command and control. How does this tie into money and business strategy? Well, it establishes a guiding principle: "Value and Leadership should frame the way we think and therefore influence our strategic decisions."
Why is this important? Because designing a business around value requires a leadership approach that looks beyond the immediate balance sheet. Instead, it cultivates a vision where profits are not the only metrics for success. Long-term value, or what can be called 'enduring value,' becomes the cornerstone for key performance indicators (KPIs), employee accountability, and team building.
The ScaleUp Journey: A Tale of Short-Term Sacrifices
Do you remember a moment in your business journey where you had to make a tough call between short-term gains and long-term benefits? 🤔 Maybe it involved hiring strategies, or perhaps it was related to business planning. The "ScaleUp Journey" that Kevin Brent talks about is filled with such 'valleys of death' where profitability might see a dip.
However, adopting a Value Proposition that focuses on the long term may sometimes require sacrificing immediate profits. For instance, investing in leadership development or advanced sales techniques can drain your current resources but promise profitable growth in the long run. So, what choices are you willing to make to bring your business vision to life?
The Owner's Trap: Are You Caught?
Kevin Brent discusses a phenomenon he calls the "owner's trap," and chances are you might find it relatable. Essentially, it's when business becomes so dependent on you that it loses its inherent value. Signs that you're in this trap include business slowing down when you're not around, or growth plateauing despite your best efforts. If this resonates with you, maybe it's time to question how much your business is designed around enduring value rather than short-term profits. 🤨
The 8 Drivers of Value
Monopoly control - What sets you apart?
Recurring revenue - How stable is your cash flow?
Customer Satisfaction/Loyalty - Will your customers recommend you?
Hub and Spoke - How central are you to business operations?
The Switzerland Structure - How balanced is your dependency on key stakeholders?
Valuation Seesaw - How efficiently are resources utilized?
Financial Performance - How robust are your financials?
Growth Potential - What are your prospects for scalable growth?
This set of criteria not only adds meat to your business strategy but also offers an actionable framework for entrepreneurs at different stages, whether novices or experts in business planning and execution.
So, as you think about money, do you see it merely as an end or as a means to build enduring value? How well does your current business strategy reflect these principles? 🌟 Cheers!
Navigating the Landscape of Value-Driven Strategy 🌱
Just as we've discussed, the real shift begins when we refocus our strategic decisions through the lens of enduring value, not just immediate profit. I'm reminded of the time I worked in engineering before becoming a business coach. It was clear that any sustainable engineering project required rigorous planning and a focus on long-term value. Similarly, creating an enduring, valuable business requires a foundation built on strategy and the foresight to execute it.
The road to building enduring value often comes with its set of "valleys," especially when it comes to financial considerations. So how do we navigate this? Cash Flow Management and the Profit First Approach are good starting points. But let's ask ourselves: Are our Marketing Strategies and Sales Techniques aligned with our Business Vision and Value Proposition? Is the Team Building aligned to foster Employee Accountability? Each cog in the wheel, from Business Planning to Performance Feedback, plays a role in this journey.
Now, I'm sure some business owners are wondering how to measure this shift in strategy. Enter Key Performance Indicators (KPIs). These are not just metrics; they're signposts on your road to value. Ask yourself:
What KPIs truly reflect the enduring value you’re trying to build?
Are your current Meeting Management practices designed to evaluate these KPIs and pivot the strategy as needed?
Bringing to light the insights on the 8 drivers of value, let's explore a few of them and relate them to our current practices. For instance:
Monopoly Control: Does your business have something unique that sets it apart, adding to its enduring value?
Recurring Revenue: Is your business model designed in a way that revenue isn't a one-time occurrence but rather a continuous stream?
The Switzerland Structure: How much is your business dependent on a single client, employee, or supplier?
The nature of these questions doesn't just guide you towards maximizing profit; they're fundamentally geared to help you design a business around value.
Here's an example that resonates well. Imagine two business owners at different life stages; one is looking to retire soon while the other has a longer journey ahead. Naturally, their short-term goals could clash, especially if profitability directly affects a retirement payout. But what if the strategy shifted to building enduring value that both could benefit from? Suddenly, long-term investments in Hiring Strategies, Leadership Development, and Business Execution take centre stage. Through Great Conversations, fabulous results can manifest.
The Owner’s Trap as stated before, is another concept that many of us fall into. Many businesses that fall into this trap often find their Business Growth plateauing. It’s time to "Fix What Bugs You" and rethink how business decisions are made. What’s the point of having freedom and control if the business can’t thrive without you? How can you "Grow People" and systems within the organization to take over some of your roles? Once you start making it visual and getting it out of your head, the easier it becomes to identify areas where your business needs to evolve to step out of this trap.
Summary & Key Takeaways 🎯
Building an enduring business starts with a shift in mindset from short-term profitability to long-term value.
The pillars of designing your business around value lie in effective Business Planning, aligned Sales Techniques, and robust Cash Flow Management.
Metrics like KPIs should not just be about performance but should act as your guideposts on your journey to enduring value.
Remember, Leadership Can Be Learnt. Adopting a mindset change towards value-centric leadership can resolve conflicts and contribute to Profitable Growth.
Stepping out of the Owner's Trap involves empowering your team and processes so that the business can scale and evolve independently.
Business Joy comes from running a business that doesn't just give you short-term gains but provides a meaningful, enduring contribution to all its stakeholders. So, ask yourself, "What step can I take today to bring enduring value to my business?" After all, just do it and find out.
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