The 5 Secrets of Business Success

Preface

You can’t learn how to run a business from books alone. You need experience to make sense of doing business in this highly commercialised world. Without direct experience, the profusion of business advice available today can be simply overwhelming. Should you be worrying more about your unique selling point or your cash, the leadership of your employees or the fundamentals of strategy, the day-to-day operations or your longer term plans?

I have been a business manager for more than 30 years, as both a 'salry-man' and an entrepreneur. I have worked in more roles and more sectors than anyone I have yet to meet: in big businesses, small ones and those in between; in UK ones and international ones; and in both good and bad ones too. You can find my CV on my blog at www.ecomevolve.co.uk.

Wouldn't it be useful if you could have a few guiding principles to help you to see what is really important in building a more successful business? This short book aims to help you better understand the 5 Secrets, which are my conclusions about what really matters after being intimately involved in so many different businesses.

On its own, this introduction to the 5 Secrets will only make you aware of the importance of these issues. You may well need some help to interpret them and implement the actions they imply, but awareness is a great start.

There is huge value in understanding my 5 Secrets, but beware, they are not as simple and straightforward as they seem. I call them “secrets” because in spite of being disarmingly simple ideas they are very hard to understand and apply. They are the fundamental building blocks of business success that lie beneath some of the more familiar, and necessary, rules and behaviours that you need to apply to compete in business today. They are the unspoken rules of the game of business success.

Introduction

I hope this article will help you to understand what I think is most important if you want to succeed, and to avoid the most common reasons for failure. To my mind they are the unspoken rules of the game of business success. I'd be delighted to hear your views about what I have to say in this e-book or on my blog. If you want some help to put these ideas to work in your business, I’d be happy to discuss how I could help more directly. For the past 10 years, I have helped some of the most successful businesses in the UK apply these ideas.

Know what you don’t know

“There are known knowns. These are things we know that we know. There are known unknowns. That is to say, there are things that we know we don’t know. But there are also unknown unknowns. They are things we don’t know we don’t know.”

Donald Rumsfeld, former US Secretary of Defense and businessman

it is very important to know what you don't know when you are running a business, because "unknown unknowns" have been the cause of many business failures. Many of these unknown unknowns have been quite easily "knowable", but the decision-makers concerned haven't been sufficiently aware of the need for sound data when making decisions, or they have just been too lazy, or over confident in their own abilities.

Business leaders create value by making decisions and these are mostly what you might call investment decisions. There is a minimum level of information you need to have confidence that you are making the right decision. Some of this is objective information: facts that you can get from interrogation or analysis, but other information is more experiential. Some of the information you need to make a good deci- sion is what I call subjective evidence and it can only come from past experiences.

When making a decision, you need to make sure you have all the data. You will only know what "all the data" means if you have made his sort of decision before, probably more than once. Because of the subjective nature of much of the data required to make more difficult strategic decisions you need to enlist the help of someone who has done this before if you haven't.

While people put a lot of effort into tactical investment decisions, and often analyse and compare all the options before buying, they aren’t as rigorous with more important decisions and rather than get- ting help they tend to guess.

If you have a big decision to make about your business and you haven't done this sort of thing before, always get help from someone who has. This is such a simple idea that it is easy to dismiss. Often it is dis- missed because things you know little about seem relatively simple and it is easy to get sucked into making very poor decisions and taking on much more risk that you realise.

The biggest culprits can be very successful and able people, who assume that success in one area or business activity can be easily mapped onto another. Sadly, that is often not true because many successful people don’t actually know why they were successful in the first place. This is the first of my 5 Secrets for a reason; ignoring it leads to the biggest mistakes and the most failures.

Stay different

“In order to be irreplaceable one must always be different.” Coco Chanel, pioneering French fashion designer

The best businesses don’t compete directly with others. Better to be sufficiently different and have a defensible position in a market. This should be the aim of every business. For most it is possible. Unfortunately, difference isn't given enough attention by many businesses, which is why they are less successful than they could be.

There is much written about difference. It is all true. So you need to think carefully about it and apply the rules to your business. Many people find this hard to do because they don't think very clearly about their business. They are not clear about why people buy from them, or often, what business they are actually in.

All businesses would benefit from following a proven process to ensure that they have positioned themselves to best advantage in their market. It is a vital starting point, a competitive necessity if you want to survive and prosper. The problem is that creating a difference in the fist place is often a big enough challenge for a business, let alone maintaining it over time. Companies often rely on time-bounded technology, or events, or sets of specific circumstances to compete and sadly they have a habit of fading away. It is very common for a business to have a short period of success where its difference has allowed it to prosper, which then ends as time and the competitive environment changes.

So, being different in the first place is a hard enough thing to appreciate and manage. It is another order of complexity to stay different, but it is possible. As competitive life cycles shorten you need to keep looking ahead, anticipate change and continually take action to stay different, if you want to keep growing and developing as a business. It won't happen on its own; it requires attention and leadership.

Just look at how many big brands there are out there that have not "stayed different" for long enough and have been overtaken by events. To my mind, this is often a failure of leadership and management.

Make sure the worst doesn’t happen

"Take calculated risk. That is quite different to being rash." George S. Patton, WW2 army commander

If you don't follow my first secret, above, you have a very good chance of taking on much more risk than you realise. Having experience of a certain type of investment decision allows you to make sure that you don’t take too big a step. You should always take small steps forward when managing change in a business.

The most important steps though are those to do with how you implement the results of your thinking about my second secret. Exactly how are you going to position yourself in your market in order to be credible to your target audience in a way you are capable of both implementing and defending?

Always take small steps, moving forward confident that you have minimised all the knowable risks, but in a way that if the world chang- es, and the totally unexpected happens, you aren’t going to lose your shirt. You need to be able to survive a failure at each step along the way. All this must sound pretty simple but most growing businesses don't seem to find it so, or many big ones for that matter.

Apply leverage at the right time

"I not only use all the brains that I have, but all that I can borrow."

Woodrow Wilson, 28th President of the United States of America

There is only so much you can do yourself. If you want to grow, at some stage you are going to have to leverage other people's time, expertise and money. All of this comes with health warn- ings because, recruiting, contracting and funding are all minefields for the uninitiated. If you haven't done this stuff before you will do much better with some help, but unlike the bigger decisions, mistakes here are unlikely to be quite so catastrophic, you will just waste your money, your reputation and your time.

Apply best practice to the basics. For instance, when recruiting be careful, don’t employ apparently exceptional people, always take references and always have a probationary period during which you measure their performance. Many people do none of these things.

Funding is a whole topic of its own and requires careful thought and plenty of experience. You can have plenty of cash and if you don't have a good plan it's easy to waste it, but there are windows of oppor- tunity for businesses when additional funding can allow them to make a confident move forward that wasn't possible otherwise. Recognis- ing a window of opportunity and differentiating it from a leap into the unknown is essential to these major decisions in the evolution of your business, but even here, my third secret applies.

So, while there are many obstacles to leveraging your business, by which I mean using other people’s time, expertise, or money, to help you grow more quickly and in a profitable way, leverage is a necessity if you want to grow beyond a certain size.

Remember Agincourt!

"Don't reinvent the wheel, just realign it." Anthony J. D'Angelo, personal development guru

Most businesses are not aligned enough. This is particularly true of ones that are changing because they are growing, or the world is fast changing around them. Many businesses operate in more or less controlled chaos and that leads to much inefficiency, wasted effort and under performance.

A business needs a clear strategy that is constantly being managed and adjusted to refect events. It should be based fundamentally on some inherent market advantage with a strongly articulated position in that market. If a strategy doesn’t do this it has little chance of aligning the rest of the organisation. If it does do it, then you can align the organi- sation, people, their incentivisation, budgets and leadership behind it.

Watch any film about Henry V and his battles. Just hold onto the images of the arrows fying parallel to each other through the air. They weren’t going in different directions, where they? Nor should the various component parts of your business. Alignment is a very important part of tuning a well-directed business. It is impossible in a poorly directed one.

So, remember Agincourt!

Disclaimer

The information contained in this guide is for informational purposes only. I am not a lawyer or an accountant. Any legal or financial advice that I give is my opinion based on my own experience. You should always seek the advice of a professional before acting on something that I have published or recommended.

No part of this publication shall be reproduced, transmitted, or sold in whole or in part in any form, without the prior written consent of the author. All trademarks and registered trademarks appearing in this guide are the prop- erty of their respective owners.

Users of this guide are advised to do their own due diligence when it comes to making business decisions. By reading this guide, you agree that myself and my company are not responsible for the success or failure of your business decisions relating to any information presented in this guide.