“No” is a full sentence
- Global, South Africa
- Company disposal, Entrepreneurship, Management, Shareholder exit, Systems, Value creation
- May 29, 2020
Many make the mistake of thinking that strategy is an esoteric concept, found only in presentations and the agenda of “yet another meeting”.
We can hardly blame them for feeling this way.
The thought of a “strategy offsite” conjures up images of questionable coffee and impractical hotel venues with diet-ruining lunches. The day only gets worse, offering the prospect of a forced dinner with your colleagues instead of your family, all while pretending that “this year, it will be different”.
This isn’t a failure of strategy as a concept, but rather the result of strategy being poorly conceived.
Lift your head
If you think that strategy should only be discussed once a year in a cramped conference venue, then you’ve missed the point.
Your strategy is the aggregate of the tactical moves you make as an organization every day. Like a school of fish swimming together, the actions of many create the direction of the whole.
The modern economy and the blessing (curse?) of constant connectivity means that industries are more competitive than ever before.
When your working life feels like you’re stuck in a washing machine, being thrown around inside with little chance of escape until the weekend (if you’re lucky), it becomes incredibly difficult to lift your head. Too much time is spent asking “how” instead of “why”.
What sets top executives and companies apart?
Top entrepreneurs and executives free themselves up to ask the right questions.
Systems are built to create efficiencies. Managers are hired and empowered to make decisions. Clients are actively managed and unprofitable work is turned away.
The alternative, which will be painfully familiar to many, is a company where strategic people are caught up in operational issues. Instead of doing corporate development, they are managing crises. Managers either aren’t competent or empowered to deal with the issues. Systems are inadequate.
Stephen Covey explores this concept in “The 7 Habits of Highly Effective People” with his Urgent Important Matrix. Leaders should focus on important work that isn’t urgent, but instead they get sucked in on urgent problems (not all of which are important).
This pain is normal. It’s a growing pain. For some though, it’s a forever pain. If you hope to one day sell the company as a legacy business capable of flourishing without you, you need to build it in a way that makes you redundant.
It takes incredible discipline, but the rewards are worth it.
The path to redundancy is paved with saying “no”
I once had a manager who taught me that “no” is a full sentence. It doesn’t always need to be justified. Saying “no” is part of building respect and trust.
Conversely, saying “yes” to everything is a slippery slope.
Firstly, just because something increases your revenue doesn’t mean you should take it on. Companies need profits, not just revenues.
Your business systems need to allow you to measure your profitability properly. Without a clear view of client or product profitability, you can’t prioritise your time and become redundant.
Secondly, if you take on too many strategic projects at once, you risk making simultaneous mistakes.
Investors value focus and clarity, not broad promises and vagaries. It’s better to deliver on a concise pipeline of strategic projects than to miss targets across a wide range of initiatives.
Empower yourself to say “no”
Each time you say “no”, especially in the beginning, it’s going to feel like a kick in the gut. You didn’t make it this far in life by walking away from things, right?
Making these decisions is easier with proper data and structured thinking. If you can clearly see why no is the right answer, you sleep easier at night. The toughest decisions are those clouded in uncertainty. Strategy is an art, not a science.
To free up your time, you need the right people in the right seats and they need to feel empowered to make decisions. You need to develop them and trust them. They will become more marketable as they grow, but with the right environment around them, they will want to stay.
In every decision you make, consider whether the path you are taking is improving or weakening your prospects of eventual redundancy.
Companies sell on a multiple of annual revenue or earnings, so building the business properly and one day selling it is the right way to extract the full economic value of your efforts.
The alternative is to stay stuck in the washing machine, never asking “why” or saying “no” to anything.
This article is a collaborative effort between The Finance Ghost and Arete Advisors – all rights reserved.
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