What's your financial context?

?I recently had two interesting conversations about financial context, and the way leaders think about revenue and opportunity.

In the first case, the executive team was presenting a case study about a new service offering. This new business initiative was worth around $2M in revenue - frankly a sum that is dwarfed by their core business, but it has massive potential, and is likely to scale as a significant part of their 5-year strategy.

The CEO agreed with me that this ‘little project’ was bigger than the whole first year’s revenue of the firm a couple of decades earlier. This is how he pitched it back to his team to make sure they saw the financial context. Everything starts small, but if we nurture the right choices, they will contribute to growth.

In the second instance, I was in discussion with the leaders of a $25M family-owned, industrial business. I asked the family about their aspirations to grow and they landed on $50M as their next significant target.

The founder was not convinced, so I probed his thinking. If you’ve already raised your business from nothing to $25M over the last couple of decades, is it harder or easier to have done that … or to double revenue to $50M? He thought doubling was harder.

It was an interesting comparison of how Founder/Owners think. For those who have learnt that from “little things, big things grow”, a stretch goal seems logical. Others, who are more risk averse, prefer protecting what they already have. They are stuck in a poverty mindset despite having rich opportunities available.

What stories do you tell yourself about money? How does your own view get projected into the business? What is the impact on the level of goals you pursue, what you charge for your product/service, or how you reward yourselves and your team?

In my business coaching practice, I challenge clients to set ambitious long-term goals, but to ground them in the reality of what they pursue over the next 3 years, current year and next quarter so that everything aligns between their vision, their financial objectives and the priorities required to deliver on them.

You can explore more about developing a Vision and Big Hairy Audacious Goal in Chapters 3 and 4 of my first business book, Propelling Performance. Pick up your copy here