Business Truth No.1 - Build Solid Foundations.

After spending many hours interviewing inspirational business owners and entrepreneurs over the course of the last 10 episodes, I've pulled together seven "truths" about business that have featured heavily in almost all of their stories...

To listen to the full epsiode with all seven truths, or for all of my business interviews with inspirational business owners and entrepreneurs, search for "The Turth About Business" in all good podcasting apps!

So, lets get started with the first...

Business Truth No.1 - Build Solid Foundations.

No matter if you’re building a small retirement bungalow or a cloud piercing sky scraper, the first and perhaps most important part of the process is to build strong foundations that will stand the test of time and keep the structure standing firm against the harshest of weather conditions.

It looks like the same goes for building a successful business.

Investing time in getting the foundations right for your business early on means that regardless of how large and how quickly you grow, these foundations will help your business to keep its original identity instead of taking on a life of its own and becoming something that you didn’t intend, nor want, it to.

Three of the core ingredients of your business foundations are your vision, your values and your purpose.

Now I doubt that there’s many of you reading that haven’t heard of these three terms.

BUT… what will differ is the importance you assign to them based on the experience, or lack of experience, you’ve had with them in the businesses that you’ve been a part of so far.

For many, these terms are nothing but business “fluff” that can be seen attached to the walls of the head office to impress outside visitors.

But venture one layer beneath the top brass and talk to the employees who are on the front line living the business each day and they have no idea what they are, or more importantly, what they mean.

However, when you’ve seen businesses that take these principles very seriously and the results that getting them right bring about, you can’t help but respect the power of them IF (and it’s a big if) executed properly and if they truly become a part of the DNA of the whole organisation.

Take Susan Hallam for example.

Susan and the team at Hallam have built one of the most successful digital marketing agencies in the country and they’re internationally recognised as leaders in their field.

In our interview Susan attributed a large part of the ongoing success of the company to what she calls her “North Star” – which are the guiding principles that the business, and everyone within it, has stayed true to since the very first day of launching Hallam.

So why are they so important and how do you use them?

So, let’s start with the “Vision”.

Your vision for the business is where you see it in 5, 10, 15 years’ time.

It’s like a long-term goal of what you want the business to look like, the type of people you want to be working with, the awards you’ve won, how it feels to be a customer, the turnover you’re generating, the profit you’re making, how much your staff are paid, the positions you have in the business – it can be anything.

It might be, and should be, a million miles away from where you are now but it gives you and the whole business something to aim towards and to commit to.

It’s impossible to hit a target that’s not there.

And like most things in life, if you don’t have a target, a pinpointed destination or outcome that you want to achieve, you end up treading water – no matter how hard you work or how many hours you put in.

When the business has a clear sense of direction, it makes it much easier for the whole team to align and when business decisions revolve around getting to a defined destination, you start to see progress – like watching a huge cruise ship pull away from the port and start moving.

Maybe at less than walking pace, but making progress nonetheless towards its tropical location.

Everyone in the business knows what they’re working towards and if you’ve done it right, everyone knows what’s in it for them (a massively important part of the process) so the team are fired up and excited about helping the business to get there and they’re in it for the long run which makes retention of great people less of an issue.

Having a clear vision also helps to attract better candidates when you might not be able to pay as much as your longer established competitors that may be able to offer better salaries.

Here’s why.

When you can communicate a compelling vision to a potential candidate that excites them and they know they can be a valuable part of, that’s worth more than money to a lot of people as it gives them a clear purpose in life, other than just getting up and going to “work”.

Most of us want to be a part of something special and there are many people out there who will chose to work for a company with drive and ambition where things will work out for them better in the long-term and they actually enjoy what they’re doing, versus joining a company that pays more, but ultimately, all you have is a job and no idea of where the company is going and what your involvement is in that.

Which would you rather be a part of?

And the most exciting part about creating your vision, well I’ll leave it to a well-known quote from the infamous Napoleon Hill;

“Whatever the mind can conceive and believe, it can achieve”

OK, so next is creating your company’s “purpose”.

This concept has gained a lot of notoriety over the last few years due to the wildly popular book “Start With Why” by Simon Sinek – a book that many of my guests have referenced in their interviews.

Whilst I personally don’t put as much emphasis as Sinek does in your company’s “why” as being THE number one ingredient, I do agree that it’s an important part of a winning combination and can be a powerful force if utilised properly.

Your “purpose” or your “why” usually heralds back to the origins of your business and is the deeper reason that you started in the first place, which is why it’s easier to get this down on paper in the early stages when that purpose is still fresh in mind instead of trying to get the business to fit a new version of your “why” later on.

It’s not your brand promise or what you deliver to your customers.

Instead it’s the deeper reason your business exists to provide this service – which for most of us is going to revolve around enhancing or making your customers’ life easier in one way or another – your product or service is the means to the end.

Once you’ve settled on your purpose, everything your company does revolves around bringing it to life and delivering on the purpose is how you move towards your vision for the business.

Even if your strategy or tactics change over the years, sticking to your purpose is how you build a business that stays true to its origins which is a surprisingly common feature in many companies of all shapes and sizes that have stood the test of time.

Here’s a couple of examples of company purposes, and as you’ll see some of them pay no attention to the actual product or service the company provides, it’s their higher calling:

IKEA – “To create a better everyday life for the many people”

LG – “To spread the power of optimism”

Tesla – “To accelerate the world’s transition to sustainable energy”

Starbucks – “To inspire and nurture the human spirit – one person, one cup and one neighbourhood at a time”

Nike – “Our purpose is to unite the world through sport to create a healthy planet, active communities and an equal playing field for all”

So, you might be thinking, “OK, well it might be nice to have some fancy paragraph about saving the world to impress potential new recruits and customers – but what difference does it actually make to the business?”

Here’s an example.

Let’s say we have two estate agencies.

Agent A’s purpose is to simply “sell houses”

Agent B’s purpose on the other hand is to “help people to start the next chapter of their life in the best possible way”

Agent A hasn’t put the time into creating their purpose and so team members are left to come to their own assumptions about what they’re there for – selling people’s houses.

To them, it’s just a job.

Agent B however has really etched their purpose into the DNA of the business.

New recruits are told about it, it’s part of their new starter training, it’s talked about in the office, it’s talked about in team meets, it’s talked about in appraisals and one-to-ones and everybody that’s a part of the business knows what they’re here to do and the difference they’re making to people’s lives on a daily basis.

To them, it’s more than just a “job”.

Now imagine the difference in how these two agencies operate and how it feels to be a customer.

Whilst they may be in essence providing a similar service, the way in which that service is delivered is going to be worlds apart.

Who do you think has the better reputation?

Who do you think receives more five-star reviews?

Who do you think the top performing staff want to work for?

And ultimately, who do you think customers are happy to pay more money to?

What you might find is that in industries where it’s very difficult to come up with a clear differentiator from your competition, having a strong “purpose” that runs deep through the business could be all you need to set you a million miles apart.

And so to summarise the value in having a clearly defined and powerful company purpose, I’ll refer back to a quote from the previously mentioned author, Simon Sinek;

“People don’t buy what you do, they buy why you do it”

The final part of these business foundations are your company values.

I expect that for many listeners, when they hear this phrase, you think of empty and meaningless “business” words.

The same sort of words that teams on “The Apprentice” usually end up calling themselves – think “synergy”, “stealth” or “velocity”.

I have no doubt that it many companies, this is the case.

However, what a clear and well communicated set of company values should do is define the type of people you want in your business, the way in which you expect everyone in the business (including you, the business owner) to behave and help you to create a strong company culture, instead of have the company create it for you.

So how do you use company values?

Well first of all, you use them to recruit like-minded people who are all working together, rowing the ship in the same direction to reach a shared goal.

You talk about them in your job adverts and in your interviews to find people who resonate amd allign with the values of your company.

You use them in performance management – in appraisals and one to ones and stack up how team members are performing against the values and if they need to make any behavioural changes.

This is where company values can be particularly useful.

It’s easy to assess someone’s performance.

They have targets – have they hit them?

Providing you have the correct KPIs and reporting systems in place, that should be clear as day to both parties.

It’s a clear-cut case

However, to call out someone’s behaviour and hold them to account when you have nothing to benchmark it against is difficult.

That changes when you have company values.

They become your benchmarks for behaviour and if people aren’t acting accordingly, they’re dealt with in the same way as if they weren’t hitting their sales targets or whatever other KPIs you have in place.

And in the worst-case scenario, if a member of the team is not pulling their weight in either area, a clear set of KPIs and company values should mean that you never have to fire anyone – which is a terrible experience for both sides.

If done correctly, the person in question will either step their game up and fall into line, or realise that they’re not the right fit for the and leave of their own accord.

But you can also use them to motivate, engage and bring your team together by having values “champions” – getting each person to nominate someone each month, quarter or even year who they feel has shown a noteworthy display of one of the values and provide them with an award and a small gesture of appreciation.

It goes a long way.

They allow you to empower staff to make good decisions without having to ask you for guidance, freeing you up to spend more time working on the business because instead of making decisions for everyone, the conversation now becomes “As long as your decision is in line with the company values, I trust you to make that decision for yourself.”

Ultimately, when you have a clearly defined and well communicated set of company values with visual aids throughout the business and a commitment to make decisions in line with them at all levels, you’ll build an amazing culture of like-minded people who love what they do and push you and the business towards your goals, instead of you having to pull them – as Steve Gandy of Circle Business Coaching talked about in his interview.

So, there you have you core business foundations.

Your vision, your purpose and your values and all of them feed in to one another.

Now if you’re anything like me, you might be thinking at this point;

“OK, I get all that and it sounds great on paper but ultimately, will it generate any more business and will it help me to grow faster than I would without them?”

It’s a question I have pondered for many years, even after trialling and experimenting myself.

However, just recently I was honoured to be able to spend a couple of hours with Stewart Vandermark who is the CEO of Nelsons.

They’re one of the largest and most successful law firms in the Midlands with offices in Nottingham, Derby and Leicester.

They’ve won more awards and accolades than you can shake a stick at and are fast approaching a turnover of ￡20 million with some huge plans for the future.

Stewart took on the role of CEO in 2017 and since then, with the support of the original founders of the business and senior leaders, he has led on ongoing campaign to drive all of the above into the business.

What really took me by surprise, again we’re talking about a law firm here, was when Stewart pulled out of his jacket pocket a small booklet with “Our Vision” on the front and a Nelson logo.

Inside the booklet, the vision, their why, their values, their goals – it’s all in print, crystal clear and easy to understand.

Every single person in the business receives one of these booklets when they first join so they know exactly what they’re a part of and where they’re heading.

And does it make a difference?

Well to start off with, their primary brand colour is bright orange.

At Nottingham, you walk into an amazing, modern reception with receptionists in smart, brand coloured uniforms and there’s even a no-expense spared staff area for the team to get themselves a drink, or just work in peace in some cosy chairs.

I asked Stewart the same question;

“It looks amazing but does it make a difference?”

His answer was unequivocally “Yes”.

After plateauing at the same (still impressive and healthy) turnover for a few years in a row, this whole project has seen the business really start to power forward and back on to some serious growth.

And it’s not down to adding new services or bringing in better people, it’s down to getting the right people in the right place and then getting the most out of everyone through a team that are far more engaged and working towards a common objective.

And given that Stewart was only last year named as the top company leader in the East Midlands, I think it’s safe to say that this stuff really does work.

Now if you get these set early on, it’s far easier to build the business with these foundations already laid, rather than having to try and change the business later on down the line when you might have people already in your team that don’t quite fit.

It’s not that you can’t do it later, you absolutely can and I don’t think it’s ever too late to start but you should expect some level of disruption because let’s face it, most of us aren’t comfortable with change.

You should also expect that some people may decide to leave after realising that they’re no longer right for the business – or you may have to make that decision for them.

That’s almost par for the course when bringing in these things at a later stage in the business cycle so be prepared for that to happen – it’s short term pain but it will be far better for the good of the business moving forwards when you replace those who no longer fit with the values and culture of your company with people who do.

Before we wrap up this first business truth, I just want to leave you with a couple of pointers.

Firstly, this is not a “set it and forget it” exercise.

If you’re going to implement this, you have to fully commit and that means from now on, every single day you’re in the business, talking passionately and enthusiastically about these foundations so it’s front of mind for everyone and doesn’t get lost and forgotten about in the heat of battle.

It might feel awkward to begin with, but most new things do – and it’s not something people will be familiar with from previous employers.

But your team will follow as you lead and if you’re not talking about it constantly and taking it seriously, no-one else will.

And if you’re worried about sounding like you’re repeating yourself – you know you’re doing it properly.

There’s a section about the importance of constant reinforcement of these company foundations in the great business blueprint of a book that is “Scaling Up – Rockefeller Habits 2.0” by Verne Harnish.

It talks about how Hatim Tyabji built Verifone from $31 million to $600 million in 11 years.

He created a “blue book” (similar to the Nelsons “Vision” booklet) which outlined the values at the heart of Verifone’s culture and translated it into eight languages.

Tyabji attributes a large part of his success to spending the next eleven years “repeating himself”, as he himself put it.

Secondly, if you’re going to hold your team to account on a set of company values, you better be sure that you’re living and breathing them too because if they don’t see you acting in line with them, they’ll see no reason for them and it sabotages the whole process.

Your company values don’t HAVE to be your own personal values – but if you expect your team to buy into them, you have no option but to be an exemplary example of them so don’t set a company value that you find difficult to adhere to.

Nobody is going to get it right all the time, which is fine,.

Encourage a relationship with your team where they’re comfortable with being called out on the values, but equally, you’re happy for them to do the same with you.

And finally, it’s important that these values are clearly defined.

What exactly do you mean by “Team”?

What exactly do you mean by “Growth”?

Don’t let there be any ambiguity around what these company values actually mean and give some examples of the type of behaviour or value in action.

A great idea as suggested by Andrew Deighton of AWD Development Solutions is to let your team come up with some guidelines for how they should behave.

When your team comes up with the ideas, they’re far more likely to take ownership and have more pride in what they’ve created.

Which means it’s more likely to happen.

And so, to bring to an end my first business truth, which is to build solid foundations, I’ll end with a quote from Elvis Presley, who said;

“Values are like fingerprints. Nobody’s are the same but you leave them over everything you do”

I hope you enjoyed reading this article and that you may have also learned something from it.

If you have any questions, suggestions or stories of your experiences with these concepts, I'd love to know.

Message me on LinkedIn or just get in touch!

Make it a great day and here's to your business success!

Benjamin :)

Host Of The Truth About Business Podcast

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