In this blogpost we shall slightly depart from our usual main focus on the owner-managed and family business boardroom onto a matter that is applicable to all, and determines our behaviour at work and ultimately our success in life, at work and, for those who are in business – the health of our business.
In my work as an advisor to SMEs I am always surprised with how rarely the owner/leaders give the relevant importance to each and every minor decision that is taken. It is very easy to find a reason why a particular problem exists but it is very difficult to look into the mirror and accept that the underlying root cause of most problems is the behaviour and attitude of the business leaders themselves.
One client I had, often used to make a funny statement to attribute his business challenges to luck or destiny. It went something like – “life is like a block of marble that gets split in two, one half gets sculptured by Michelangelo into the Pieta’ and the whole world pays to admire it, whilst the other half ends up being carved into the urinary at the same museum and all visitors get to pee on it.”
Well funny as it may be, I do not subscribe to this point of view. Just as true as there are things in life that we cannot control but only attempt to prevent, such as the god-forbidding unwanted illnesses, misfortunes or acts of God, most of our future is in our control through each and every single decision we make.
In our childhood, decisions are made for us by those who have custody over us. We don’t get to choose the environment we are born in, the neighbourhood we grew up in, the school we attended and many others. But there comes a point in our life when we start taking our decisions and whether we like it or not our future is a direct consequence of every single decision we make, even the smallest ones.
In business this is even more important, and the real-life stories I can relate to here are indeed many, some of great success and others of misfortune or utter disaster, all attributable to a series of deliberate decisions made by business leaders. The toughest to overcome are those assumptions that get stuck to our guts from ‘experience’ yet never really put to the test until too late.
The solution is a conscious choice of working on our personal decision-making process. On what considerations should we base each and every decision we make? I strongly believe that there is no unique set of skills that can sharpen your decision-making, simply because we are all different. So it is rather a set of values, the values I put together in the word L.I.F.E. itself that is the solution. These are Learning, Integrity, Fairness and Effectiveness. Two are inward focusing and two guide our relationship with others.
I shall be delving much deeper into how we should apply these values in our daily lives throughout the lifetime of this blog. Suffices for now to say that when we put these values as the basis of our everyday behaviour we are equipped with the necessary wisdom to balance out each and every decision we take, even the smallest one into very powerful and potentially life-changing opportunities.
Taking decisions is inevitable, and shaming away from decisions is the worst thing an aspiring leader can do. Yes true, sometimes (though rarely) things may fall into place and controversies die out if you allow enough time, but in the meantime your credibility and authority as a leader flies out of the window too. “There’s nothing worse in life than to sit there and be a victim of a process that’s outside your control,” Sergio Mahcionne once said.
Before sharing with you stories I acquired in the course of my training and profession I will start with a personal experience that took place seventeen years ago yet had a huge impact on my career. Seventeen years ago, just about thirty years old, full of energy and feeling invincible, I had identified a huge opportunity in a particular sector and decided that I wanted to throw all my energy into that sector. The first important conclusion I had managed to reach by learning from the mistakes of others is that I could be much more successful in that line of business if I partnered with a foreign experienced firm in the sector. I remember well how myself and a colleague of mine prepared a good business plan and sent a pitch to a number of european operators in the sector. A few ignored us, a few engaged in discussion with us but a particular one gave us immediate attention. They were the best, our favourite and preferred, but we had a problem. The regional manager in charge of the development for this huge brand had immediately told us that it was not possible to partner in any way, yet seeing the quality of our preparatory work they were prepared to retain us as local facilitators on the territory. When we started getting proposals from others, we had to choose. It was a very tough decision. In these seventeen years all other players have somewhat disappeared, to the extent that had I ventured into the sector (with any of them) we would be dead by now, and to this day, this firm remains my main client for most of the past seventeen years.
I shall share with you another story, this time an unfortunate one based on a wrong assumption that cost the life of the company. I was once called in to attempt turning around a business that was in serious financial trouble. But contrary to what I usually expect to find, at first glance it seemed unreal that such a firm could end up in financial difficulty. The owner/manager spent so many hours at the workplace that he surely couldn’t give more, employees were very skilled and teamwork was exceptional, the production line was bustling with work. So how could this company go wrong? On closer examination, it became evident that the company had an issue with the low levels of gross profit the lines were contributing. That was until I learnt that the majority of the company’s revenues was coming from public tenders. To my shock I discovered that the owner-manager had devised his very own way of bidding based on a puzzling assumption. Basically he used to bid in public tenders by looking at the most recent successful bid by any competitor and simply undercut the last successful bidding price by around 5% (without conducting proper costings). And he was so confident that this was the secret to his success, that as the financial difficulties started to creep in, he refused to believe them possible and started attributing the cause to other issues such as pilferages or dishonest employees. He was so confident of his ‘winning tactic’ that he never bothered to closely look into the commercial viability of each project. To cut a long story short, the large majority of the work delivered in the preceding three years was sold at a loss. The focus was wrong. Focusing solely on winning tenders does not imply generating profits (as they say revenue is vanity, profit is sanity…).
There are so many stories and anecdotes that can be told of small decisions that had a major impact on history. Every small decision that you take (not only strategic, but even in day-to-day operations) shape up the outcome of the different scenarios we are in. Focus on decision making, to be in control of your own destiny and that of your business. Decisions directly affect outcomes and subsequent consequences. Whenever decision-making is delegated, always keep tabs on what is or has been decided. Here, I am not saying you should be a control freak, but you should have visibility. Take informed decisions. Think of all the possible outcomes. Decide based on your value-set and vision. Every decision, whether big or small, shapes our future self.
