This book is a fabulous follow-up to Bag the Elephant, also by Steve Kaplan. In this elephant book Kaplan talks about becoming the elephant we were targeting. He discusses, "why growth is not only desirable, but necessary." We started a good business and we need to map its growth, in which Kaplan points out the three essential factors for sustainable, successful growth. When you answer the question "Think you're ready to grow?" you are in for some real work. This is not a sit-down book, this is a "do-something book" and like running a business, there are rewards for doing it right. After all, as Kaplan notes, "To last, you have to grow" and we all know that to grow you have to be willing to put in some effort.
I got to page 23 "The Guts of the Model" and had to stop to identify some core functions of my company before I read on. The information required is detailed and getting it is not a small task. Yet, I kept thinking to myself, "this is a book I can go back to later. I know this, but I will estimate that." It still took quite a bit of time and I got through it but I know I could have been more specific with my answers.
I had 6 pages of notes and details about my company when I finished. Next I moved on to the risk analysis. In the chapter "What's the downside?" I reviewed and reveled the risks of running my business. Again this required some time to complete but I had a reward at the end because directly after this chapter is the assessment of the health of your company in the form of the Business Success Quotient (BSQ).
So, one-and-a-half months later I am finally doing my BSQ. Often I just shrug off this type of assessment as being too superficial, like the surveys in Cosmo, but I am still driven to see the results. In this case the assessment is clearly based on data and other key elements (like assumptions, risk, values, my personality, passion, and experience) that made the outcome a much truer, revealing look at my core business. Just so you know I am fairly competitive and I like to do well on these assessments, which may mean that the outcome is as expected or better than expected.
Well, I got a rude awakening to the idea that I am running a healthy, sustainable business. I did not fall a little below the bottom level, I fell a lot below. In fact the exact working in Kaplan's book is "This is a very high-risk business and is not likely to work. You should seriously consider moving on to a different opportunity." All is not lost because it is possible change your scores by going back and putting in the 100% effort to complete the information as well as evaluating where the weaknesses are and shifting the business to make it stronger.
This was quite disheartening news and I will have to spend some time determining whether to evaluate and reassess or to move on. I have always been aware that something is not working right in my business and I have been struggling to find a way to identify it. This assessment just gave me the tools to see it more clearly. The very next day I am in the office of Mario Perek of Industry Canada. He has been in the medical device and biotech sector for well over two decades, which is the industry my company targets. In his own words he feels that "companies [in Canada] have to export. They cannot survive selling in Canada." It was definitely a different perspective than the rosy outlook painted by the industry. Although I do know that it is a difficult industry to flourish in I do believe there is a very healthy market for growth. So, should I spend time looking for that market or should I "move on" as Kaplan would say.
Well since this is a book report I will say that this is the end of Part 1. I am 65 pages into the book and I will read no further until I can make the first 64 pages valuable to my company, what ever that may be.
I do recommend reading this book and going through the exercises. I think it will help you determine where your strengths and weaknesses are and possibly change the direction of your business. By knowing this information you will give your company a strong base in which to support your elephant.
Steve Kaplan - The Difference Maker
Thursday, February 14, 2008
Monday, February 11, 2008
Corporate Growth - What Happens? - Part I
Growing a company is painful. Even if you have done it before there are many hurdles that must be overcome. Hopefully if you have done it before you have a system that helps you meet the goals you have set for your company. If you have not done it before then talk to as many business owners that you can, read books, listen to seminars, take courses to benefit from the mistakes and successes others have made.
This article is going to cover some of the painful transitioning points I have been witness to in my own business and in my experience with other businesses. This is not a road map but more like a legend.
Giving up control
One of the first things you will feel when you get to the point that you can no longer do all the work required to keep the business providing great products and service is a loss of control. The depth of this loss will be determined by the length of time you spent doing everything yourself. If you have put your systems into place and you have structured you business so it can be operated by others then you will get over this feeling of loss very quickly. The freedom to continue to grow your business while it operates on its own is liberating.
Hiring the right person(s)
Have you ever hired someone and found that they cannot do the job as well as you do? There are several reasons this may happen, one of them being our intrinsic need to control our business. If we look at the abilities of the employee we may find that we hired them for the wrong reasons. It may be as simple as we hired the right person for the wrong position or that we hired the wrong person for compassionate reasons. There are many books out there that describe how to see the worth of the potential employee as well as assessments and companies that can help you make the right choice.
Jim Collins wrote in his book Good to Great, "Get the right people on the bus". This means your company will be much more successful if all the people involved in running your business are the "Right People". It also means that your corporate growth will be less painful if you have competent people able to do the work required.
Strained communications
Running a company should never be like the kids game "telephone", where one person tells the next and the message surges through the company hoping that the last person receives the same message that was sent. This is often how we handle our internal communications. We expect our upper management to inform the managers and they inform their team leads and they, in turn, inform their project team members. I believe that a successful corporation supports an environment that allows everyone in the system to know the status of the company, where it is going and growing, and how it plans to get there.
We don't see great football teams standing around the field hoping they will know what to do if the ball comes to them. We see them huddled together, getting their directives and planning their moves. When they break everyone knows what they are going to do this 'down' that is going to get them closer to the goal and ultimately the win.
It is the same in business, the larger the organization the more distorted the communications can become. Take time to make sure everyone on your team knows where you are going. Even if you are just one person with a team of contractors, they will get you to your goal if they know what is expected of them and where they are needed.
Also, make this a bilateral communication. Make sure that the information, feedback, innovations, problems, and successes can get back to you. Like any relationship, the more open the communications are the healthier it will be. A healthy corporate environment leads to happy associates and sustainable growth.
Documenting systems
One of the toughest things you will need to do almost from the first day you start you business is to document the process in which you do your business. Obviously if it is just you at the helm, you can choose where to go and when. You probably will not sail your company far by yourself but alone you can do what you want.
When we grow our businesses we need others to do most or sometimes all the jobs we had to initially fill ourselves. We can pass on our knowledge through training but it will be difficult as time passes to remember what parts of what we did was successful and what was not. Our predecessors will make changes based on their experience, some good, some not good and again we will have no way to compare the changes to the original process.
By documenting all the processes within the company we set a standard of operation that must be met by all associates. If someone has a better idea it can be implemented into the process and adopted by all associates in the company. This ensures a consistent business operation that will provide a consistent level of product or service.
Think about some of your favourite businesses to patronize. Do you go there because every once in a while you enjoy your experience or do you go there because you always enjoy your experience. I am personally not a fan of McDonald's food but I know if I arrive with my kids for a treat they will be thanking me for days. They will totally enjoy the experience, every time we go, without fail and hence I will enjoy the experience. This is the consistency we all need to give our customers.
The E-Myth series by Micheal Gerber is great reading. It helped me determine what systems I had in my company and what processes had to be documented. After I had been in business for a couple of years I could see what was working as well as what was not working. These will be living documents that will grow with your business.
Next - Part II
In part II of this article we will cover the increasing cost of growth, training, and information management.
This article is going to cover some of the painful transitioning points I have been witness to in my own business and in my experience with other businesses. This is not a road map but more like a legend.
Giving up control
One of the first things you will feel when you get to the point that you can no longer do all the work required to keep the business providing great products and service is a loss of control. The depth of this loss will be determined by the length of time you spent doing everything yourself. If you have put your systems into place and you have structured you business so it can be operated by others then you will get over this feeling of loss very quickly. The freedom to continue to grow your business while it operates on its own is liberating.
Hiring the right person(s)
Have you ever hired someone and found that they cannot do the job as well as you do? There are several reasons this may happen, one of them being our intrinsic need to control our business. If we look at the abilities of the employee we may find that we hired them for the wrong reasons. It may be as simple as we hired the right person for the wrong position or that we hired the wrong person for compassionate reasons. There are many books out there that describe how to see the worth of the potential employee as well as assessments and companies that can help you make the right choice.
Jim Collins wrote in his book Good to Great, "Get the right people on the bus". This means your company will be much more successful if all the people involved in running your business are the "Right People". It also means that your corporate growth will be less painful if you have competent people able to do the work required.
Strained communications
Running a company should never be like the kids game "telephone", where one person tells the next and the message surges through the company hoping that the last person receives the same message that was sent. This is often how we handle our internal communications. We expect our upper management to inform the managers and they inform their team leads and they, in turn, inform their project team members. I believe that a successful corporation supports an environment that allows everyone in the system to know the status of the company, where it is going and growing, and how it plans to get there.
We don't see great football teams standing around the field hoping they will know what to do if the ball comes to them. We see them huddled together, getting their directives and planning their moves. When they break everyone knows what they are going to do this 'down' that is going to get them closer to the goal and ultimately the win.
It is the same in business, the larger the organization the more distorted the communications can become. Take time to make sure everyone on your team knows where you are going. Even if you are just one person with a team of contractors, they will get you to your goal if they know what is expected of them and where they are needed.
Also, make this a bilateral communication. Make sure that the information, feedback, innovations, problems, and successes can get back to you. Like any relationship, the more open the communications are the healthier it will be. A healthy corporate environment leads to happy associates and sustainable growth.
Documenting systems
One of the toughest things you will need to do almost from the first day you start you business is to document the process in which you do your business. Obviously if it is just you at the helm, you can choose where to go and when. You probably will not sail your company far by yourself but alone you can do what you want.
When we grow our businesses we need others to do most or sometimes all the jobs we had to initially fill ourselves. We can pass on our knowledge through training but it will be difficult as time passes to remember what parts of what we did was successful and what was not. Our predecessors will make changes based on their experience, some good, some not good and again we will have no way to compare the changes to the original process.
By documenting all the processes within the company we set a standard of operation that must be met by all associates. If someone has a better idea it can be implemented into the process and adopted by all associates in the company. This ensures a consistent business operation that will provide a consistent level of product or service.
Think about some of your favourite businesses to patronize. Do you go there because every once in a while you enjoy your experience or do you go there because you always enjoy your experience. I am personally not a fan of McDonald's food but I know if I arrive with my kids for a treat they will be thanking me for days. They will totally enjoy the experience, every time we go, without fail and hence I will enjoy the experience. This is the consistency we all need to give our customers.
The E-Myth series by Micheal Gerber is great reading. It helped me determine what systems I had in my company and what processes had to be documented. After I had been in business for a couple of years I could see what was working as well as what was not working. These will be living documents that will grow with your business.
Next - Part II
In part II of this article we will cover the increasing cost of growth, training, and information management.
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