are you the pilot or engineer in your business?

Getting a large freighter safely into the right harbour is a complex and risky process.

Just like growing a successful small business.

In the world of ocean shipping, there are layers of responsibility in getting a vessel loaded and safely from one harbour to the next. At the top level are the shipping executives responsible for deciding what is to be carried, when and where the cargo is to be loaded, the destination for unloading, and the general routes to be taken. These are all strategic decisions. Strategic planning is the process of establishing outcomes and high level steps to achieve those outcomes in a generally uncertain environment.   >>tweet<<

The captain of the vessel is responsible for getting the ship, crew, and cargo to its destination safely and economically. To do this, the captain makes tactical decisions. Tactics are the ongoing execution of actions that respond to opportunities and threats in any given moment, while achieving the objectives of the larger strategic plan. The captain may vary speed, direction, and other operational aspects of the vessel while sailing the ship to the destination set by the shipping executives. Shipping and sailing are two different activities.   >>tweet<<

Also on the vessel is a crew of engineers and other professionals responsible for the minute-by-minute operational health of the ship. It is their job to ensure that all of the decisions of the captain or the pilot are executed at the ‘mechanical’ level. 

As small business owners many of us start by being shipping executive, captain, and engineer all at once. Or as our grandparents put it: chief cook and bottle-washer. That is not a problem.

Where the problem begins is when business owners don’t stop acting in all of those roles. Far too many remain down in the engine room trying to get the ship to harbour simply by making sure the engine is running well. We know how that will probably end.    >>tweet<<

We talk about working on the business instead of in the business. Having the owner of the business spend their lives down in the operational guts of the business is like trying to oversee the successful journey of an ocean freighter from inside the engine room. It is unlikely you will get where you want to go. And if you do, you will probably be more lucky that profitable.

Becoming Strategic

Every business has an organizational chart, written out or not. It has a set of roles that must be successfully executed for the business to grow. Commonly at the beginning the owner’s name fills every ‘box’ on that org chart. But as the business grows, it is important that the owner gradually remove themselves from those boxes and hand over responsibilities to others. They must move from being operational to tactical to strategic.

By the time a business has hit its full stride the owner should only be in one box: Chief Executive Officer, or in the context of this article chief strategic officer. And here’s the chicken-and-egg catch: as the business grows you must become more strategic, and if you don’t become more strategic the business won’t grow. But which one comes first? It doesn’t matter. There is no cookie cutter solution, only a firm grasp on the idea that as each opportunity presents itself to move some operational and tactical responsibility to someone else, take it!

In my description of strategic planning I said it occurred in an ‘uncertain environment’. One of the truths of operating in an uncertain environment is that it requires your full attention. You can’t be strategic when you are bogged down with operational details. You will miss important signals and if your ship even comes to harbour, but there will have been no profit in the journey.    >>tweet<<

What Strategy Looks Like

How do you know when the things you are doing are strategic? What does that look like? If you are not spending at least 80% of your time each month engaged in these processes you are still being too operational or too tactical:

  1. Constantly reviewing ‘who we are’ and ‘why we do what we do’ These are the two most important questions a business owner must ask regularly, especially in the 21st Century economy where the speed of change and disruption is so much greater than it has ever been.
  2. Constantly assessing the environment. What do your customers want? What will they want next year? What new markets, technologies, trends, and cultural shifts are on the horizon that are going to impact your business? Where are your competitors headed? Where are local and global economies headed?
  3. Exploring long term plans. Where will you be next year, or 3 or 5 years from now? And I don’t mean just sales targets. I mean which markets will you be in? What new revenue streams will you be exploring? What kinds of things will you be competing on? What do you want your customers to think about your brand? What will you stop doing? Which activities, services, or products will you wind down? Will you be focusing in or broadening out? What will your team look like 2 years from now? Who would you need to fill in those boxes on the org chart to make your business what you envision it to be?
  4. Declaring ‘wins’. You get to decide what good enough looks like and you get to decide what success looks like. Decide you must and you must share that vision with your organization. The don’t know where to point the boat or how fast to go (how many resources to burn through) if you don’t communicate that to us.
  5. Focusing resources. Nothing changes or grows in business without drawing on resources. What will growth cost? How much time will it take? Who will do the heavy lifting?
  6. Reviewing who will be responsible for tactical and management decisions to realize your strategies. Will you make every decision? Will existing team members have more decision-making responsibilities? Do you need any new levels of tactical or management expertise? Do you need new ships with new captains?

Becoming Less Tactical

A great question at this point is: if I am going to put more of my focus on being strategic to grow my business what kinds of tactical or operational things should I let go of?

This is a list of activities I see business owners hang onto for too long, missing opportunities to grow their businesses and secure their positions in the market. Always remember: if you aren’t’ growing, someone else is. Don’t act all surprised if you don’t take these steps and wake up one morning with your sales in free-fall. Someone out there was being strategic.    >>tweet<<

To become increasingly strategic, find an exit from:

  1. Financial and administrative roles. Tasks and roles like data entry, scheduling, routine correspondence, bookkeeping, accounting are best done by someone else, and the among very first things to pass on. 
  2. Sales and marketing. You might be the best lead generator or closer in your organization, but if the growth of the business is dependent entirely on your capacity then you have just defined your limits. Don’t ever fall for the hogwash that you are the ‘best there is’. You aren’t. There are brilliant and successful sales and marketing professionals out there who perform to one key metric: they generate more in sales than they cost you. Bring one of them in and move on to bigger things.
  3. Operations. Whether it is inventory management or keeping the machinery running, stop taking care of it as soon as possible. You can’t think about the next quarter if you are spending 4 hours each day ordering and pricing. You can’t think about where to take your company in 2 years or how to best motivate the new manager you just hired if you are under a desk repairing a network connection.
  4. Delivery. By this I mean the actual products or services on which your business is built. If you are a painting business this means stop painting. If you are a baker this means stop baking. This is one of the toughest things for small business owners to let go if they have started their business from a specific activity they love. My suggestion? Cherry pick. If you truly love painting, only paint the best, for the best clients. If you truly love baking, pick few hours where you bake 2 or 3 things that are your absolute speciality. But you are going to have to find some way spend 80%  of your time on the strategic leadership of your business. For me here is the heart of this issue: baking and growing a bakery are two completely different activities. You can only do one well with the time you have. If you really love to bake above everything else, should you own your own business? You might just end up baking while Rome burns.

At the Great Performances Group we improve the success of small and medium business anywhere in the English-speaking world. Check us out to find out how. Read Clemens’ book “Great Performances – the Small Business Script for the 21st Century.” Leave a comment or question! A Facebook “Like” is sweet too.

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