The Horrible Cost of Thinking Culture is Vision. In Blackboard Fridays Episode 78, Jacob talks about Commercial Vision. Need this implemented into your business? Talk to the international business advisor who can do exactly that – Contact Jacob, Learn More, or Subscribe for Updates.
Sometime after the ‘Greed is Good’ meltdown of the late 1980s, management theory finally realised that there’s more to life than money … and how relevant that is for business.
As business owners we make decisions based on gut feel, not perfect logic, and our team members stay because they’re happy as much as they stay for the paycheque. But increasingly, especially in Australia which hasn’t had a recession for 27 years, I’m seeing this “Culture eats Strategy for Breakfast” philosophy send companies in the wrong direction.
This is particularly true if you have ever run a Vision exercise for your business that was solely focused on the Cultural side – Mission, Values, Purpose, Intent and so on. This is just as one-sided as creating a business based on how much money you can make, and it’s just as unsustainable.
So in this week’s episode, which you can watch here, I give you permission to TALK ABOUT MONEY. To connect with your deepest, capitalistic dreams and to put up some dollar figures that help define where you want to go as a business, and with your personal life. Connected to the Wealth Quadrant episode, we also talk in both Income and Equity.
Business is never ‘just’ about the money; critically, it’s never ‘just’ about the Culture either. So whatever your Cultural Vision, use this week’s framework to ensure your Commercial Vision connects.
Who is Jacob Aldridge, Business Coach?
“The smart and quirky advisor who gets sh!t done in business.” Back independent since 2019.
Since April 2006, I’ve been an international business advisor providing bespoke solutions for privately-owned businesses with 12-96 employees.
At this stage you have proven your business model, but you’re struggling to turn aspirations into day-to-day reality. You are still responsible for all 28 areas of your business, but you don’t have the time or budget to hire 28 different experts.
You need 1 person you can trust who can show you how everything in your business is connected, and which areas to prioritise first.
When it comes to the layers of context, those key decision-making filters that drive every aspect of your small to medium business. Sitting at the top is your vision personal cultural and as we’ll discuss today, commercial. I talk sometimes about strategy being like going on a road trip where your vision is the destination.
If I jump in a car here in my home city of Brisbane, with no idea of where I’m going to drive, well I might end up in Cairns or I might end up in Melbourne and I certainly don’t feel like packing for both. with your business, it’s the same having a clarity of vision that you and most importantly your team can latch on to ensures that day to day decisions all of the stuff that’s going on in your business are done guided and informed by where your business is headed.
This is a very simple tool that I use to help business owners articulate their commercial vision for them. It’s a very simple matrix with four questions, we’ve got separated are equity and income. If you go back and watch the Wealth Quadrant episode, one of the very, very first Blackboard Fridays episodes we did, we talked about the critical difference between equity and income ensuring that you get the financial security you need to have the freedom in your life. The other axis was separating out business and personal.
We’re helping you to understand the the business commercial goal is connected to the personal but the two of them may be separate particularly if you have business partners on this hand, or life partners over in this regard. So it doesn’t matter where you start. For most business owners when I do this activity one of these quadrants jumps out most. They immediately want to talk about for instance the amount of revenue they dream of one day generating in the business or potentially the amount of revenue that they want to bring home.
Others are much more equity-oriented they very very clear in their mind that one day, they want to sell this business for however many million dollars. Usually a round number which I’ve talked about in previous episodes this meaning it hasn’t been fully thought out but whether that’s one million, ten million or a hundred million, it’s a good business equity target for you to build on.
I actually don’t talk to too many business owners who thought about the equity they need in their personal life. What personal worth you’re building outside of the business and that is a mistake that many business owners make and only discover when they go to retire when they go to sell the business and discover that that 10 million dollar business is actually only worth 8 or 2 or nothing and they haven’t actually built personal equity outside of the business.
At the end of this exercise, you want to have information in all four boxes. Some may be more detailed than others. But having that there allows you to then talk to your life partners about what you’re building commercially, wealth-wise for the family. To talk with your business partners and make sure that you are all aligned on the same page. And then to take some of this information adding to your team.
You don’t need to share your personal aspirations with the team. You don’t need to share every aspect of the business side with your team. If you want to be on a million dollar business, you don’t need to explain to the team the things you’re doing on a tax perspective to make sure that most of that goes into your pocket. You don’t need to talk exactly about how much profit you want to be making as a business owner each year unless that’s relevant for their role but taking out the key elements of the commercial vision lets them know that you are building a financially stable company that they can work out to the future. For their personal vision they can connect and see how working for you and helping you achieve your dreams similarly helps them to achieve theirs.
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