If you’re a small-to-medium sized business owner, founder, operator or executive struggling to increase revenue, deal with the adversity that recent events have caused, or just want to unlock your potential business growth, keep reading. If you are thinking of starting a business, want to leave your job because you’re convinced you have a great idea, please come back when you’ve generated your first half-a-million dollars in revenue and hired a team to help you run your business. The tools I’m going to show you won’t work unless you’ve proven some level of market fitness. In other words, come back and read this when people were repeatedly buying from you. I say “were” because recent events may have changed that for many successful businesses, and as an entrepreneur in the United States, nothing will make me happier than helping every struggling business bounce back stronger and better than before.
Let’s set one thing straight. There’s always uncertainty in business. From the smallest company to the largest enterprise, there are problems to fix, fires to put out and obstacles to overcome. Every single day you are in business, competitors are out to steal your customers, you sometimes get in your own way, issues happen, and oftentimes big problems [feel] like they keep piling on. Yet, you keep pushing ahead because you feel like there’s opportunity to succeed. Once you understand how to identify those opportunities and implement the tools, you will see the results you thought were reserved for all the other companies who post their wins on social media and in their quarterly filings. Your entire strategy matters more today more than ever before, but instead of figuring out how to pandemic-proof your business, I’m going to show you how to anything-proof your business.
Who am I and why does it matter?
First, I’ve succeeded a few times, but failed a few times. Ok I’ve failed many times, but it’s through those failures that I’ve wanted the same thing you’re here to find: success. Out of that desire, I’ve sharpened leadership teams, increased company performance, and performed turnarounds faster than management consultants told me was possible. Someone once told me business is like golf: It’s not about the great shots, it’s about minimizing damage from the bad ones. I didn’t quite understand what that meant, maybe because my golf game was mediocre. I now understand: It means business will serve you a variety of scenarios, situations and challenges. How you respond and prevent those in the future will all add up. Your business is effectively the sum of hundreds and even thousands of small decisions and tweaks you’ve made over time. There’s no silver bullet, or a single make-or-break decision. Your business isn’t just failing because you don’t have all the capital you think you need. The evolution to minimizing damage is proactively putting things in place to minimize what feels like a reactive business. Through the sections in this guide, I’ll show you why being proactive is a major key to unlocking the business model that you’ve only dreamed about.
I came to the United States in 1979 to escape turbulent times from Iran and grew up in Southern California. I come from a hardworking family with the grit to launch and grow their own businesses. My father had four jobs when he moved to the United States with his three children, all under five years old at the time. I’ve launched my own successful companies, brought hundreds of products to market, performed turnarounds and have helped other founders, owners and entrepreneurs do the same. As I mentioned before, I’ve failed. From each failure I’ve learned at least one lesson, one major takeaway that’s required me to rethink and tweak the way I was doing something. The combination of all these lessons led me to my first successful exit, selling a company I had built, cultivated and grown into a revenue-generating machine. I want to share this all with you.
I’m not one to sit idle. I’ve started, failed, tweaked, and pivoted numerous businesses over my journey and now understand why some businesses succeed, while others bleed themselves to death by a thousand cuts. A recent company I was helping had more than a thousand cuts. If there was an emergency room for businesses, this company would be in-and-out every day. I brought out my med-kit and over time, started seeing a turnaround in the key metrics. I saw customer churn decrease and customer satisfaction increase. I saw revenue stabilize, then grow. I saw EBITDA profitability go from breakeven, to 6%, 12% and finally 15% in a matter of quarters. I saw the leadership team turn into a high-performing machine, candid, open and willing to take on and beat challenges reserved for risk-minded entrepreneurs. I’ll show you how to do all of this for your own business.
There’s an important point to make before we move further on our journey together. Anybody can do it. You can do it. Once you understand there are tools available, and you learn how to incorporate these in everything you do, it will transform your business forever. As someone wise once told me:
“There’s no better business school than the experiences you’re going through right now.”
So let’s all go through these learning lessons together.
Company = Product
Your company is a product. This is important, so let me say it again a little differently. Your company is your core product. Everything about what you do, how you do it, who does it, where you do it and why you do it is your cornerstone product. This is true whether you provide a service or physical good. Nobody sets out to build an inferior product, and you don’t want to constantly glue and patch a broken product to keep it going. As a potential acquirer or investor, you definitely don’t want to put your money behind a crappy one when there’s a better, faster, stronger one on a shelf nearby. Every decision you make becomes either a feature or a defect in your company. You need to design your company with the same care and attention as your revenue-generating offerings. So now that we all understand that your company is also your most important product, you need to ask yourself:
What features do you want to add to it and what defects would you like to remove? Do you want a high-performing team that can help you remove and prevent issues or a low-cost team where you have to spell everything out for them every single day? Do you want an expensive office in the New York Financial District or take over the garage at your house?
While some decisions may be more apparent to you, there are others that heavily shape the features of your most important product; your company. Some examples include your hiring and firing processes, your working culture, how you talk to customers, and even how you handle adverse situations like a pandemic. There’s so much to think about, and only one of you. I’m going to show you the way you can get the most bang for the least effort, and I apologize in advance for using one the most overused words in business: focus.
The first area of focus should be your culture. A company without a defined culture will define one as it goes along, and that’s an issue because it also comes with hidden defects. If your company has been around for a few years, chances are you have a culture defined, and there are likely stronger subcultures within the various departments that conflict with one another and with the overall organization’s vision. A quick test is to ask five people in your company to tell you the company core values or mission. If you get five dissimilar answers, you have a culture problem. You can’t expect everyone to be driving full speed towards one goal if everyone is on a different page. It’s not fair to them, and it’s not fair to you. If we think of the company as a product, these become core defects that need to be removed. You do this by defining a culture, then making sure everyone in the organization understands it and wants to be a part of it. Yes, you’ll have some attrition because of the new culture, but you need the right people in the right seat, and self-selection is actually one of the most painless ways of ensuring the right people are in the right seats. Even better is having a formal, culture-focused hiring and firing process so it’s not a waiting game. You can work with the leadership team to define the culture, you can hire experts, or you can do a hybrid. In my experience, working with leadership encourages buy-in and you’ll hear ideas and values that from the diversity of experience your team brings to the table. I’ve also seen consultants work well with leadership and the entire company, so it really comes down to time and cost.
Here’s the steps you need to take to begin defining the culture you want to be a part of:
- Generate a list of your core values
- Stress test those core values
- Refine your core values
- Publish your core values internally
- Incorporate them in everything you do
Sounds simple. Almost every organization I’ve worked with gets stuck at the first step. Don’t worry, I’ll break down each step in the Acceleration phase, with common pitfalls and how to overcome them.
If your team doesn’t know where it’s headed, there’s no way to tell if goals are really being successfully completed along the way. You can see it, but I promise that your team doesn’t see it the same way you do. This is why it’s absolutely critical to write it down in a way that’s clear, concise and can be repeated back to you by anyone in the organization.
Another thing to keep in mind is that vision can often include your mission or mantra, or can be a separate statement on its own. Let’s take a look at what some of the greatest authors and business minds have to say:
Mantra: The meaning behind your company. Guy Kawasaki recommends three words or less in his book, Art of the Start 2.0.
Mission: What your company will relentlessly focus on. Jim Collins refers to this as your The Hedgehog Concept in his book, Good to Great.
Core Focus: The who, what, where and how it takes to get there. Gino Wickman refers to this as Core Focus in his book, Traction.
Now let’s see some examples:
Mantra: “Authentic athletic performance” for Nike
Mission: “Most convenient drugstores” for Walgreens
Core Focus: “Popcorn” for Orville Redenbacher
There are plenty of examples online for so many companies, and you’ll see a common thread among them. They prevent distraction internally. When the leadership team at Orville Redenbacher sits together, they are talking about all things popcorn. Their core focus prevents shiny new ideas from entering their world, because they know that creates waste through lack of clarity.
Your most important resource. Sounds simple when you read that, but it took me over half my career to figure this out. You see, I came from a mindset that everyone is replaceable and that I could do everyone’s job better. Boy was I wrong. Not only was I wrong because that’s not how high-performing organizations scale, but I was wrong to think I should be doing everyone’s job. Don’t get me wrong, I don’t micromanage and I prefer teams to figure things out on their own, make mistakes and grow. The sum of all these learnings becomes the domain expertise that you’re paying for, and growing upon to make your organization better.
The other side of this is new people bring new ideas, and oftentimes, those ideas are better ways of doing something at your company. So once again, people are your most important resource, whether it’s new ideas from new people or better ways of leveraging existing people’s domain expertise to move the business forward. Your job as a leader is both parts retaining the right people and finding the new ones to elevate your organization.
Of course, I’ve also learned that not everyone is the right fit for your organization. Every organization has detractors to go along with the promoters. Once you implement tools to analyze your employees and contractors, it becomes easy to identify the ones that aren’t a right fit, or aren’t in the right seat. There are frameworks to help guide you through this, that I’ll discuss later on. But now that we understand this, I’m going to rephrase what I said earlier to the right people in the right seats are your most important resource. It’s just as important to use data to find customers as it is to find the right people. I’ll show you what happens when you rely less on people by relying only on the right people.
You’ve got your business processes down. You’ve figured out what to rinse and repeat to generate revenue, or at least, you thought you did. Everything was working fine until macroeconomic conditions altered your business path for the foreseeable future. How you respond to those conditions will dramatically alter not only how you do business, but whether you are thriving or starving.
There are three major areas to dive into, immediately: Acceptance, Adjustment and Acceleration. When executed properly, this Triple-A combination will not only guarantee your survival over the coming years, but will also set your business up for long-term revenue growth and higher profitability. While it’s possible to do these out of order, cherry-picking the areas or topics that seem fast or easy will only result in short-term gains.
By definition, many of the topics I’ll be discussing are related to your existing processes, or lack thereof. One of the reasons you’re likely reading this right now is because you feel the urge to improve your business, and likely think it’s a process problem leading to poor performance or inadequate adaptation to the current events. You’re not wrong, but the problem stems deeper than just processes. For your organization to thrive in current times and then accelerate when the economy begins its inevitable rebound, you need to look at the bigger picture and all the components within it. Process is critical, but if you have the wrong people or lack vision, process changes and redesign alone won’t do much for your organization.
Continue reading Part II. If there are topics you’d like a deeper dive into, have feedback on, or want just a little more clarity, please don’t hesitate to comment.