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What Do High Growth Businesses Do Differently?

Over the past 5 years the importance of the “High Growth Business” and how this relatively small group of businesses disproportionally impa...

Friday 23 March 2012

The Board Meeting How a Functioning Board Works

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Having recently written about the problems of dysfunctional board meetings it seemed logical to put together an article about what functioning board looks like. Without stating the obvious a functioning board meetings are the opposite of a dysfunctional board.

Lets remind ourselves that a board meeting is about strategy and policy its about looking out and forward. Operational management issues are kept for the management meeting. 

Typically a fully functioning company board will have developed a clear strategy for moving the business forward. Strategic planning will have been evidence based and discussed and agreed. This give the board meeting a common purpose and a framework and context in which to hold discussions.
English: Muhtar A. Kent, Chairman of the Board...
Image via Wikipedia

Attendees come fully prepared for the board meeting. This means that reports on topics of interest or key issues for the business will have been prepared and published in advance of the meeting ideally at least 48 hours before. This allows other board members to review the information prior to the board meeting. The benefit is that the discussions now focus around the issues rather than simply seeking information about the issue.

The board meeting will have a standing agenda, which typically includes a report from the Chief Executive and each functional executive director. Often fully functioning board meetings will have standing agenda issues to be reviewed on a semi annual or annual basis, for example salary policy, marketing plan, budgets, and health and safety. These agenda items support good governance of the business and keep the discussions at strategy level.

Clearly a strategy is nothing without implementation and a functioning company board will exhibit confidence in their management team and delegate implementation to them but with director oversight. 

It is importance that companies use board meetings as an opportunity to get an external view of their business; external advisers or non executive directors are a valuable addition. Their role is to provide knowledge of  the industry or extensive business knowledge that can be used to support or challenge the executive members of the company board. This kind of expertise is extremely valuable especially for owner managed business where there tends to be a shortage of trained management. It does not have to be a formal appointment it needs to be some who you trust and from who you would accept criticism. 

The key to a successful company board meeting is open discussion. This allows all issues to be aired and all proposals properly challenged.  In this environment healthy respect of each members position is vital. Board meetings work best when there is a consensus view of the actions going forward and to do this it requires open discussion.

Another obvious but often overlooked matter is the need for a minute taker at the board meeting who is tasked with publishing the minutes and actions arising from the meeting in good time. Normally less than a week after the meeting.

So to sum up board meetings should be about strategy and not operational matters. They should be open and drive actions for the rest of the business.

Exigent Consulting provides specialist services for High Growth Business Business Turnaround, and Mentoring to the Small and Medium Business. We help business owners improve the profit performance of their business. 

Friday 16 March 2012

Culture - Getting the One You Want

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This short article will give you practical steps to identify the culture you have now and the culture you would like to have to support you as a high growth business.  We have talked earlier about the importance of a strong company culture in a high growth business and how it should be a critical part of your business strategy as it can provide real competitive advantage.

Whilst many owners in high growth businesses understand the need for a strong company culture, their business have developed without any clear focus on this aspect. There is a need therefore for a simple process to identify he differences between the culture you have now to the culture you want, and identify how to go from one to the other.

It is worth repeating that if you run a business you will have a culture. You get this by default, your company culture will be created by your values and the values of your employees. Those with the strongest personality or who are the most vocal will tend to create a dominant culture. To enable you as an owner of high growth businesses to grow faster for longer getting the right culture is a must.

Step 1 Find out what you have now. 

The simplest way to do this is for you to identify the 3 to five words which you think together describe your company culture, so for example; honesty, reliability, easy to do business with, supportive, positive.

Step 2 Find out if your staff agree

Produce a list of maybe 15 to 20 words and include you 5 initial words in that list. Ask your staff to highlight 5 words which they think best describes the company culture. By the way make sure the response to this survey is anonymous otherwise you'll have staff telling what they think you want to hear, rather than what they really think.

Step 3 Analyse the results

You are most likely to get one of three results

(a) there is a lot of similarity between your view of your company culture and that of your staff
(b) there doesn't seem to be any prevailing view of your culture amongst your employees. This suggests what ever your culture is, it is weak.
(c) your employees have a completely different view of your company's culture from you.

Step 4 Identify the culture you want

Using the same technique as in step 1. Find a few keywords that will identify your new culture.

Step 5 Create culture champions

As a busy owner of a high growth business you don't have either the time or the capability on your own to change your staffs attitudes. You will need the help of other key members of the team to become "cultural champions" to keep reinforcing the new cultural message. 

Step 6 Implement your new culture

Encourage and support your cultural champions to work with your staff to implement those changes into you company culture. Where are you most likely to be successful? Recruitment is great starting point as you can filter out those potential staff who like and agree with your culture. As I have stated before this is especially important in a high growth business as new recruits become productive faster.

This last step may take some time depending on how different it its from your current culture. Don't let that put you off as evidence has shown that a high growth business with a strong supportive culture will grow faster and for longer than a business which has not.

Exigent Consulting provides specialist services for High Growth Business Business Turnaround, and Mentoring to the Small and Medium Business. We help business owners improve the profit performance of their business. 

Friday 9 March 2012

Managing High Growth: Using Your Culture for Competitive Advantage

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In my earlier piece about the importance of culture in high growth businesses I talked about how culture is considered a soft skill and that most business people tend to ignore it, mostly because there is no imm
Aleutian Cultures
Aleutian Cultures (Photo credit: Travis S.)
ediate quantifiable benefit and of course because it involves dealing with people. That's for HR people isn't it?

What I wanted to share in this post was the idea that culture can be a potent weapon by giving you an important competitive advantage. If implemented and understood it can help significantly in promoting a company's growth. Your culture establishes how your company and its staff interact with one another and with the outside world (your customers and prospects). It reflects your core values and your ethics.

So how is this a competitive weapon? Well lets look at two areas where High Growth Businesses experience problems. Finding and keeping the right staff and dealing with new problems. 

All high growth businesses face many challenges which are outside the experience of the owners or the senior staff. There is naturally a high degree of risk involved in making decisions in this environment. However as a business owner you don't want to be the only person who makes these decisions and by getting your staff to face these issues it in turn develops their skills. In order for your staff to be confident about making these decisions you must have the right culture in place. That is firstly to allow them to make decisions and not be afraid of making mistakes; and secondly a culture which support risk management so decision making can be shared across the management team and moves away from blaming individuals. Having the kind of culture which supports this kind of decision making will give you a real competitive advantage.

The other area is the strength of your culture. One of the major growth inhibitors is not getting enough of the right kind of people together with the time taken to integrate them  into your business to become fully productive. Having a strong culture creates what I have termed a cultural wall it works like this.

A company'as cultural wall uses a strong culture to ensure that only those potential employees who align with your culture will stay with the company. Those who are not fully committed or are trying to change it will bounce off the wall. That is either deliberately not join or leave soon after joining. Those who align with your culture will cross the wall and feel protected. This affinity leads to significantly lower attrition and a quicker absorption of new staff bringing them up to full productivity quicker, not to mention the increased likelihood of staff putting in more effort and extra hours into something to which they feel fully committed. 

By contrast those organisations with a weak or poorly developed culture suffer from inherently higher attrition as left unchecked people develop pockets of competing cultures, which results in a generally high level of attrition, and an increased chance that new employees will take longer to get up to speed. 

It should be obvious from the above how important Culture is to a business, the quicker companies get to grips with this the better their chance of longer term high growth.

Exigent Consulting provides specialist services for High Growth Business Business Turnaround, and Mentoring to the Small and Medium Business. We help business owners improve the profit performance of their business.