The Entrepreneurs Guide To No – test your last decision

Being in business is addictive and just like alcoholics, business owners loose objectivity –wasting too much time on the wrong idea or activity.

It’s my ambition to accelerate the growth and failure of NZ companies by removing clutter and simplifying business growth. For most business people I speak with, it’s not a lack of ideas or things to do, it’s about deciding what NOT TO DO.

Do not end up being a great jockey, riding a lame donkey.  Success is just as much about keeping an objective eye out for distracting activities or ideas, as it is about finding opportunities. Don’t overdose on the “go hard or go home” attitude; make sure you are applying some rational thought to your venture.

After reviewing thousands of NZ business ideas, by far the biggest success factor is focusing on stuff that generates revenue and its beautiful cousin profit. Without profit you at best have a great hobby, something you are passionate about and good at.

So before you leap into your next venture or addition to your existing business, test your idea against my “GMC 6 reasons to say NO”:

1: Does it solve a problem or desire big enough for some one to pay money for it?
your value proposition

2: Can you differentiate your product or service from the competition?
    – your sustainable competitive advantage

3: Can you make money from this venture?
     – your business model

4: Do you have a team with enough skills to make this idea –  venture work?
– your talent

5: Is it fun?
– Your culture – motivation

6: Will it stack up against some non-emotive challenge
– Governance

This rule set works whether you are starting a new business or simply trying to improve your current business, use it to test your ideas so you can grow or fail fast.  It’s amazing how many great craftsman we have in NZ creating solutions for problems that don’t exist or are not big enough to warrant someone outside your mother and mates to open their cheque book and purchase.

So Test you last three decisions against the 6 rules….

Straight Talking Strategy – Rockefeller Habits

“Mastering the Rockefeller Habits – What you must do to increase value of your growing firm” by Verne Harnish was referred to me by an entrepreneur who thought it was my style of book: pragmatic, full of useful tips and to the point. He was on the money, in fact I found the book addictive – I could not put it down. For me it went well beyond the promise of another one page business plan template to consider, its goes on my top 10 must read business books list.

What I liked was the way Verne brings business strategy and plans back to simple lists, questions and statement. Below I have given you a taste of what is in this great read.

The right things model – 3 basic decisions Executives need to make:

  1. Do we have the right people?
  2. Are we doing the right things
  3. Are we doing those three things right?

Base Strategy:

Let’s face it, business is basically the act of Getting, Keeping and Growing – Customers, Staff and Shareholders and we get better at this when we sell stuff, make or buy stuff and measure stuff.

Verne has simplified all business strategy into two dimensions best illustrated with the diagram below.

Often in business we can make things more complex than we need to. Verne’s one page business plan and measurement framework is well worth exploring.

Note: you can download a word version of Verne’s one page plan from www.gazelles.com.

For me it’s not necessarily the exact template as much as the principles behind concise “Succinct”  business plans and measurement models.

  1. A simple framework that documents your position
  2. Use of a common language to express the strategy
  3. Develop a habit of using the framework and a language to continually evaluate process. (Like the GMC guide to NO).

This one pager is a good mix of strategy, execution and measurement and complements the business model canvas and balanced score card approach I use.  My take is, you need to work with a model that works best for you, perhaps a hybrid of all of the above.

Verne also shares his philosophy on people and management – including effective use of meetings.

We have all heard people say they don’t need help; Verne says it all “if your staff do not have bottlenecks, then more than likely they aren’t doing anything at all”. As a manager always find out your teams top 3 -5 bottlenecks, remember that it’s your job to clear those.

On KPI’s he also follows the “keep your KPI list small” model, he sights one CEO who had three critical numbers engraved on watches that he handed out to his execs’

Having worked with a number of high growth companies I have come to realise that high growth companies operate with a different measure of time and pace. Verne confirmed this with the statement:

“If you’re growing at 20-100% per year – think of each quarter as if it were a year”

Oh and the link to “Rockefeller”…. well to be honest, you’ll need to read the book for this, for me it got lost in all the great gems I took from the book on how to help companies grow fast.