Objectivity & Expertise
Today I’d just like to have a chat about objectivity and expertise.
As business owners, you’ve heard the saying you can’t see the wood from the tree basically, you get so close to it you can’t see what really needs to be done.
- Maybe you’re trading under a lot of pressure, financial time systems, banks, loan customers.
- Maybe you’re trading really, really well, and things have never been as good.
I find that a lot of people seek objectivity advice when they’re in trouble, and usually, that’s a step or two too late.
Taking objective advice from experienced people who have worked in business, run businesses, grown them, sold them, franchised them, funded them, and still continue to invest and grow with them, and I think it’s an invaluable tool.
There’s no selling pitch here, you know what I do, you follow my stuff.
I have a hybrid business management programme and I’m an executive high-end coach, but that’s not what this is about today.
I just want you to start looking around you in your network of associates, maybe other business owners that you aspire to be or you admire.
I’m not talking your Richard Branson’s, or the lunatics on Dragon’s Den and all stage show and pantomime that is these days.
I’m talking about maybe a guy or girl in the local community who’s really doing well in business.
Good, solid foundation, strong reputation, maybe on some type of mentoring programme like what I do, I’m a mentor for Doncaster Business 100.
Somebody’s who’s really respected and been there and done it, and not blagged it, if I’m being totally honest.
Power of Objectivity
So the power of objectivity, what is it?
- What does it do?
- And why you need it?
- Well, what is it?
It allows an external person, somebody who can detach themselves in a non-emotional way, to look at the situation that you’re in, positive or negative, on a high growth curve, fantastic, more cash coming in than you can spend or manage, or the other side where there’s maybe not enough cash to even keep the lights on.
So the power of objectivity, what is it?
It allows an experienced person to really look at the real issues in your business.
Someone who can look in and really unpick the story.
There will be a reason why you believe you’ve been successful or you may be struggling.
Some of that will obviously be very, very relevant, but a lot of it will just be you filling in words, either to justify the position or to relay the story if it’s more positive.
What you’ve got to start thinking about is what are the real issues here?
If we have got problems, how do we turn that around quickly?
If we are doing well, how can we keep that; doing well, sustaining and then growing into the next level?
The Benefits of Objectivity
I remember when we grew a business from 2001 to 2003, so just under two years, we grew it from absolutely a totally new start to just around 4.4 million, and we were struggling to get there.
The power of objectivity and why you need that, I think it’s obvious.
Doesn’t it make sense to get a second opinion, a sounding board from somebody who’s been there, done it, worn the t-shirt, walked a mile, walked 10 miles, walked 1,000 miles in your shoes?
Also, somebody who’s either still involved with businesses or someone current, somebody who’s going to take the cuff links out, roll up their sleeves, and get stuck in with you.
Too many people out there are just telling you what to do, and very few people showing you how to do it.
I find that distressing because they usually pay good money for people like that and whilst they’re not there to hold your hand in every single case, there’s certainly a massive responsibility for you guys and girls out there to get on with it and make it happen.
But there’s a lot of boardroom or coaches or management they do this, or try this, or use this system, absolute load of rubbish.
You need to get it down, you need to get them involved in your process, and they need to work through this process with you to get it delivered.
So the power of objectivity; get some people who are experienced, get a match and a fix, have they ever been in business in a situation that you’re in now?
If you’re doing super well, like we were doing at 4.4 million back in 2003, and you want to go to the next level then it’s pointless bringing an early start business coach in, or a non-exec who’s just getting started who’s got experience in million five or 2 million pound businesses.
Sure, they’re going to give some objectivity but they isn’t going to be the person who’s going to get you to 8, 10, 12 million, like we did.
I’m going to share with you a story by a guy, of a gentleman called William McGrath, Bill McGrath as we knew him.
Bill McGrath was my non-exec, and I had the pleasure of working with Bill for a number of years at our PLC, and even though I’d gone through a couple of six-figure exits and a seven-figure exit, I thought I knew how to run a business.
After all, I was CEO of a PLC, previous ops director and commercial director, you would think that that’s enough credibility.
Now let me tell you until I got working with Bill McGrath, I never really fully understood how to run a business.
A little story about Bill, I met Bill when he was in his late 60s, early 70s, he was the ex-chief executive of Wickes and if anybody’s aware of Wickes, the DIY chain, they’re like a B&Q equivalent, and he was the chief exec for UK and Europe, and he was the guy who turned Wickes around in the late 80s.
He was also the UK managing director of Comet Electrical in the 1980s, non-food sales and marketing director for ASDA, British Gas board member, you get the drift, serious front seat exec and we had a lot of pressure going off, we thought we were doing great, plenty of cash in the bank, we were getting quoted in our industry writers’ one to watch, Mike and his team were really rocking it doing this.
But we just couldn’t seem to get to that next level.
We were stuck at around 4, 4 and a half million for around 12 or so months, just couldn’t seem to get it, we couldn’t get it clicking and funnily enough we used to park our cars in his car park.
He used to own the building next door to the one that we owned at the park in Wakefield, and when we were short of space we used to park there and Bill was trying to rent this building out and he complained to us because it was affecting him since the tenants who were coming down didn’t think that there were any car parking spaces when there actually was.
He had about 30 spaces and we were just using half of them so he wrote me a letter and said hope this is the situation, can you stop doing it?
Really polite so I could have reacted to that sentiment with that’s a load of muck or been aggressive but I thought you know what?
I’m going to pick up the phone to this guy.
I didn’t know who he was at this stage, he was just the landlord next door and we really got on well on the phone, Bill appreciated me picking up the call and he came down next time he was on site at the park, we had a meeting and I was just absolutely blown away by this guy’s professionalism.
We had a fairly complex business model, we had recurring models, we had future incomes, we had to defer revenues for residual filings on the books, we had franchise models, we had all sorts of stuff going on with the business.
So not a straightforward business and within 20 minutes and I mean literally 20 minutes, for something that the banks never got to understand in four years, Bill McGrath had our business model worked out in 20 minutes.
Okay, it might have been a pencil sketch but he got it and that was the thing that stood out for us.
To think, for something that’s so complex with different revenue streams, different affiliate, franchise models, how can this guy get that?
So for the next few months, we sort of tried to help and cajole and convince Bill to come and work with us.
Of course, he was retired, he was running a bit of a property portfolio and we managed to convince Bill to come in and it was more of that he wanted to come in.
I think it was more of a bit of a time in there and we started working together and we enjoyed such a fun business relationship, the objectivity, the board meetings became more structured, the advice became invaluable and I still today back in 2017 if this is a time lapse video where you’re looking at this maybe years later.
This is 2017, I still have all the notes from all the meetings and there’s not a month goes by that I don’t transfer some of that into my journal.
So what’s the outcome?
Well, Bill getting involved helped us to franchise probably even better, he helped us to raise venture capital and our business grew to over £12 million.
Now, I put the entire business growth down to my team’s commitment and effort but we would never have been able to do it without having Bill McGrath.
Bill’s sadly no longer with us.
We lost Bill a few years ago, 2011 I believe and I always remember when we went to his funeral the amount of respect that peoples from all walks of life.
Big businesses were putting lovely statements and comments about Bill, his family were tremendous, we had a friend for life there with Bill.
Not only a business colleague but a friend for life so no real pitch here, just sharing my thoughts and the appreciation that I had for Bill McGrath and how he helped me become a better businessman, how he developed my entrepreneurial spark but in a controlled manner that’s not reckless.
Working and running businesses is a strong discipline and if you don’t have that objective input you find that you can get tonnes and tonnes of non-executive directors, visit someplace like nonexecutivedirectors.com and see me on there as well but just make sure that whatever you do guys, don’t ever give non-executive director equity.
The reason why, if they lose their objectivity as soon as you get them involved with the business on an ownership level, they’ll lose their objectivity and the dynamic changes.
So, by all means, reward them as percentages of performance or uplift the gross margin on their margin or whichever you’re running but make sure you don’t give equity to advisers and non-execs if you want to keep that objective and invaluable advice.
So for all you business owners, I admire you, I respect you, you’re doing an awesome job out there.
I understand sometimes how difficult it is keeping it up if you’re absolutely flying.
You do 4 million this year and then the expectancy is you need to do 6 million the year after or whatever and if you’re struggling I understand that you might be funding the business on a personal credit card or whatever, been there, done that, again as I said but I admire you, keep it going but go and find some objective advice.
If you can’t afford that, get together as a mastermind.
For those who know me and follow my stuff, they know I’m the biggest advocate in the world for Think and Grow Rich.
It changed my life at 21, 25 or 26 years ago.
There’s a section in the 13 principles there called the Power of the Mastermind.
Get in a mastermind group where you can bounce your ideas off, get input from the people you respect.
You’d be surprised how much your business dynamics can change, how much your decision-making process can change and hopefully, your bottom line will either improve or will grow even stronger.