Think about your dream home. What are the characteristics that make it a great house (or apartment, or mud-brick eco-dwelling – whatever your fantasy…)? Chances are it has these four things: it is planned for your lifestyle; it has strong foundations for stability; it has a supporting frame with windows and doors for access and visibility and it has a roof for protection from all that the elements throw at it.
Welcome to this, the third article in my Growth Metrics series about how to build and grow your business (whilst enjoying the process). Today I’m going to share my thoughts on the similarities between the business of building and building a business. The analogy makes for some useful insights – concepts for building a home can be real eye-openers when it comes to building a successful business.
For your dream home, you’ll have briefed an architect on your design objective, reviewed and approved plans – all before a single clod of earth is dug.
Our business too needs an objective and a plan. Objectives can be tricky – all too often we set ‘motherhood’ statements that are not specific, and are hard to action. We fall into the trap of outcome objectives; “This year, I’m going to grow to $1m in revenue”, rather than source objectives; “I am going to create communication that allows everyone to truly understand the value of my business”, or “This year I am going to be really clear about what my brand stands for”.
Objectives can be thought of in terms of the problem you are trying to overcome. It’s not always easy to articulate exact issues, which is where a business coach can add value, helping to define the problem in order to set a clear objective to solve it.
Next you’ll dig the foundations – deep enough to support the final size of your building. If you’re putting up a ten storey apartment block, you’ll need to dig deeper than for a wooden bungalow. The foundation of a business is the infrastructure that supports growth – where growth is a function of time, money and skills. A business will grow to the size allowed by its infrastructure; its capability to harness time, money and skills. Limited infrastructure might be not having the right financial measures in place (e.g. measuring revenue and profit without considering capacity); no process for continued skills development; not having the right people in the right roles to mitigate time challenges. Measurement is a must-have for building the business infrastructure. It is the starting point for identifying limitations in our current infrastructure, allowing us to define what ‘good’ looks like, and to implement the infrastructure changes to get there.
It’s worth also commenting here on beliefs and choices – and the part that they play, alongside infrastructure, in enabling or limiting growth. For example, you might set up the infrastructure for a billion-dollar business, but if in your heart you want a lifestyle business, the business will grow to your belief, not to your infrastructure.
With foundations dug, we build the frame. In business, this is our revenue strategy. Our house needs access and visibility, so we incorporate windows and doors. Channels, products and sales are the access points into our business. They are an intertwined ecosystem - for example, if measurement of our sales process shows that our conversion rate from phone call to meeting to sale is 10,3,1, and we have an objective to improve it to 10, 9, 7, the most effective way to action the change is by leveraging our brand, product and channel strategies.
The most beautifully built house in the world will not survive without a roof for protection. Our business will have metaphorical rain, hail and shine thrown at it, and its roof is our higher context and our brand. In the first article in this series, I described the context of our business, how it defines how it changes lives and makes a difference in the world. Context gives us the energy and drive that protects us from challenges. It is these assets that drive sustainable success.
Tim Dwyer is a business growth expert, who specialises in helping businesses strategically grow their assets, increase their business value, and improve their capabilities. Tim would welcome the opportunity to share more with you about Growth Metrics for business. You can contact Tim, and read more of his business insights and advice via his profile and learn more about Growth Metrics here.