Most businesses hit a wall at some point on their journey. Whether it’s an unexpected event, or a barrier that develops over time, what differentiates the businesses that break through from those that fail is often the mindset of the business leader – and how this is mirrored by others.
Rachel Hannan offers five tips for leaders on achieving the mindset to cultivate, based on what she’s learned from her own journey growing businesses and investing in and working with others.
1. Identify the underlying issue
Whatever the barrier you’re facing - a slowdown in sales, production issues, increased competition, cash flow pressure, it’s important to look behind the headlines. What’s the real reason for the problem?
A drop off in sales for example can be caused by a number of factors; fluctuations in market demand, changes in customer behaviour, issues with the quality of your product, or your sales team’s ability to sell. Knowing which of these is really the issue is critical in helping you address it. Your mindset and ability to adapt is key, as is how you encourage others to respond effectively. Creating confidence in the business doesn’t mean you need to always get things right first time, but by identifying and taking the necessary action promptly.
2. Learn from it
Once you’ve got through the initial challenge or crisis, it’s important not to just move on to the next thing, but to embrace a ‘learning mindset’. It’s worth investing time into assessing what led to the problem, what could have prevented it and whether this root cause is likely to create future problems? If you were blindsided by changing customer demand, how will you ensure you more effectively predict and respond early to future changes? Even if you’ve solved the immediate problem longer term success and sustainability may require new approaches and you need to be prepared to question how you do things and make changes. Doing increasingly more of the same thing will only get you so far – so make time to ask the bigger questions and consider more transformational approaches, not just for where you are now, but where you want to be.
3. Resist the temptation to be overly tactical
When you were in the early stage of your business it was often clear what you needed to do and how to do it. Proving the concept, breaking down doors to get sales, making sure people paid on time and singlehandedly providing focus for the team. With a bigger business to run, greater overheads and more to lose, reverting to focusing purely on tactical matters and reacting to individual events is unlikely to cut it. Entrepreneurs tend to be driven, focused and natural problem solvers.
The temptation to dive in and ‘fix it’ in the way we did in the early days can be very strong, but in a business of scale this may well be counterproductive, and if it works at all, only provide short term respite. A larger business requires a more strategic approach. Time invested in analysing the bigger picture and longer term implications, not just in your business but also externally in the market, customers, economy and supply chain, will pay dividends. If you fix a production or quality issue now, how will you ensure you have the right capability and systems to keep this going as further growth is achieved? What infrastructure, investment, capacity and skills will be needed and how will you source them? These are questions that can’t be answered by just looking inward. Your business is part of a much broader eco-system, so having external networks and relationships you can plug into to gain broader insight into what’s coming will help you drive change that will not only help you break down barriers now, but also in the future.
4. Harness don’t hinder your management team
When your business has scale it’s more difficult to solve problems in isolation, however experienced or expert you are. In tough times the entrepreneurial spirit that was the central driver of the business in the early days can lead us to increase our resolve, work even harder and put our ‘heads down’ in the pursuit of a solution. But this can also lead to a more transactional and directive leadership style. We don’t have time to listen to ideas, we become more inflexible in our approach, we feel pressure to deliver and we become isolated. However involving and mobilising your management team in creating the solution to break through the wall can be critical. As your business scaled you developed a management team for a reason, now more than ever is the time to use it. So harness the skills, abilities and resourcefulness of your best people – and acknowledge the best ideas may not come from you. Strong leadership doesn’t necessarily mean having all the answers, but it does create the environment in which the answers are developed, agreed and actioned.
5. Is it all about you?
There are many reasons businesses hit a brick wall, but one common element is the psychological impact this can have. While many business leaders thrive on pressure and are highly resilient, it is difficult to entirely escape the emotional cost of a business in trouble. Sometimes it is our own psychology that leads to the issues. Lack of confidence in taking the next step, or over confidence in pushing too far too fast can both be equally destructive, and running a business can be a lonely place, especially when times are tough. To avoid developing a ‘siege mentality’ where we feel isolated, defensive and vulnerable, it’s useful to embrace a trusted support network. People who understand the business enough to be a useful sounding board and provide insight and ideas, but also independent enough to be objective and offer a ‘safe ear’. Whether this is a Non-Executive Director, a mentor, or other business owners in your networks, having the opportunity to get an external perspective on the issue, your response and proposed solutions can be invaluable
As can the ability to turn your attention objectively on your own strengths and, yes, potentially gaps. The skills, experience and attributes that helped you deliver successful growth in the first few years may not alone be enough to fulfil your business’s full potential to scale. Identifying and acknowledging where your gaps are – and what and who you need to fill them is a sometimes painful, but always worthwhile exercise. Having a mindset that means you are willing to analyse what led to the barriers your business is facing, and whether your own approach has contributed, can be a key turning point. Are you a strategist or a skilful tactician? Are you comfortable with competing priorities and complexity, or a passionate and driven business champion? Can you delegate and empower to build capacity, or do you prefer to retain decision making and control?
I’ve learned that true confidence in business is demonstrated by those who are prepared to identify what their business needs for long term success that they might not be well positioned to provide themselves. Successfully attracting that talent and creating the foundations for significant future scale up is the mark of a truly strong business leader with a genuine growth mindset.
Rachel Hannan co-founded market leading public sector search & selection firm GatenbySanderson and successfully exited after just over seven years. She is now an Angel Investor and Chairman of leadership consultancy Real World Group. Rachel is also Chair of the Leeds Community Foundation, an Independent Governor on the Board of the University of Bolton and dedicates time and funding to a number of charities and social enterprises, especially those involved with helping vulnerable people into work or to start their own businesses. She has also Chaired appointments panels for the Judicial Appointments Commission and is an Entrepreneur in Residence for Connect Gazelles, a not for profit organisation supporting budding entrepreneurs and start-up companies.