Enjoy this post from the 2014 Shirlaws Australia Conference. The 2015 Shirlaws Conference is now open for registration – join me and 200 fellow CEOs and business owners for 2 days of power learning, October 7-9. Click here for information and registration.
— Jacob Aldridge (@jacobaldridge) October 22, 2014
Today and tomorrow I have volunteered to be the official blogger at the Shirlaws Australia Conference. This is the end of Day One, post four of six.
For the final session of Day 1 Nic is guiding the room through a game. Think of it as snakes and ladders for business – you roll the dice to move forward but sometimes you end up going backwards.
Just like running a business.
The challenges of the exercise reflect the common experience of private enterprise. With just one person, it’s pretty easy to divide your time. Looking at the Game Card we have 4 options:
- Production / Delivery
- “Desk” – your Administrative & Accounts infrastructure
- Growth / Strategy
Let’s take our 1 person business, and divide them up. Say 50% sales, 25% production and delivery, and 25% administration (“desk”).
At start up, you need Sales…not time spent devising strategic growth.
Now each of those has a Score:
- Sales 2 pts
- Production 1pt
- Desk -1pt
- Growth 6pts
This doesn’t mean Administration / Desk isn’t important. It’s a reflection on the Shirlaws business framework Revenue = Energy – your overheads are necessary and they cost the business money / energy. So with 1 person we go (50% x 2)+(25% x 1)+(25% x -1)+(0% x 6)=1 point.
Let’s add 1 person, moving to 2 people total. How do we split their time? It’s still fairly easy – we probably just double the time in each area. Which in turn doubles us to 2 points.
Person 3? We talked earlier today how most people now recruit a Red admin resource – setting themselves up with the wrong ratio for strong growth. And you can see that in the game – a Red person for person number 3 moves our score from 2 points to 1 point, a common “snake”.
And as the game progresses, we can see how 1 more person doesn’t always mean 1 more point. We see flat periods where the administrative support becomes essential, or the focus on Production and Delivery of our service is more important than Sales, – from 5 people to 9 for example. These are then followed by jumps.
No Man’s Land is the flat periods. Don’t get stuck there.
You’ll see the Black Strategy Growth person often doesn’t show up until 21 people. The score jumps, and we’re now ready to go to 24 people and beyond, to 48.
Nic share that many businesses get stuck at 25 people because they chose not to invest in this black person…so they get stuck.
If you’re playing the game, you’ll be tempted to put more people in growth and less on the desks in admin. In real life, it’s essential to get the right balance. Not enough Red? Your business will fall over from lack of support. Too much Black? You’ll probably run out of cash. I’ve written about this elsewhere.
So the lesson is that most businesses (you?) need to invest time in Growth sooner. How soon will depend on your industry.
For more information, call Jacob Aldridge and Shirlaws 1300 853 772.
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