Thinking Time: Priority One for Business Success

You can’t run a successful business without putting in some serious thinking time. This statement might hardly seem worth writing down; it's so obvious. After all, being to think long term and abstractly is the single most important factor that sets humans apart from the millions of other species that inherit the earth.

So read on. Indulge me.

The most successful businesses are those that have evolved within the framework of a well thought through long-term strategy ─ a strategy that is clearly articulated, rigorously followed, and regularly adapted in response to outside factors in an ever changing world. These outside factors include new technologies, competition, unfolding business opportunities and ever changing economic cycles.

Every company, including yours, runs a serious risk of underperforming, and even failing, when you neglect to put in the thinking time required to review and adapt your company’s operations in response to a changing world.

This may seem simplistic. You might be saying to yourself,” Of course I do this" ─ but let me ask you a question.

How much dedicated time have you spent over the past 60 days quietly analyzing your business ─ looking for potential problems and how to avoid them ─ and analyzing prospective business opportunities.

Chances are you’ve spent very little structured time doing this very important work. When you think about it, you will probably realize that most of your time in spent on two things: running the day-to-day operations of your business and responding to information requests that rain in in the form of a relentless barrage of email, text messages, voice messages, and mobile phone calls. Fact is, today it is becoming increasingly difficult to shield your time from distracting intrusions.

If you relate to this situation, here’s something you might want to try.
Every week, for the next two months, book in a half day of “alone time” during which you give serious thought to the state of your business and do some serious strategizing. Make this high priority time that takes precedence over everything else, except dire emergencies
Set an agenda for each week’s “alone time”. Close your office door. Here are some suggested topics to explore; each week focusing on a single topic.

1. Look for weaknesses in your present operations and decide how to fix them..
2. Do some thinking about prospective opportunities for your business and what has to be done to capitalize on them.
3. Take an “alone meeting” to learn more about new technologies that can be used to make your business more efficient and more profitable.
4. Give some thought to the people in your company. Have you got the right team? Should you be providing more training? Does your team need strengthening? Is there anyone who is not working out and should be replaced?

If you’re thinking, this sounds like a good idea but does it really work? Well I can tell you this; it has worked for me, big time. Here’s just one example.

At one of my “alone meetings” the agenda item was, “what other products can my company sell to our data base of about 200,000 individuals who have purchased our Successful Investing and Money Management course”. With a little dedicated thinking time devoted to this topic, I realized that once our clients had learned new investment skills, they would be looking for information on specific investment opportunities.

This line of thinking led to the thought that we could launch an investment advisory newsletter and offer it to those who had enrolled in our course. After the “alone meeting” where this idea was developed, I tried the idea on a sampling of clients and got an enthusiastic endorsement of the idea. With this, The MoneyLetter was launched. It was up and running within 3 months and ─ within a year ─ fully 20% or 40,000 of those who enrolled in our Successful Investing and Money Management course were also subscribing to The MoneyLetter, at $79 per year.
In the first year after its launch the company generated over $3 million in additional income and almost $1 million in additional profits from The MoneyLetter, and this was just the beginning. Within 5 years we had almost 100,000 MoneyLetter subscribers, and this publication had become our highest margin profit center.

Now, I am not claiming that, eventually we would not have figured out this special business opportunity was right under our nose. But I do know this, if thinking time was not specifically dedicated to focusing on what else we could sell to our data base, the idea of The MoneyLetter may not have come up for years.

This “alone time” strategy is something I learned many years ago from Charlie Sweeney the President of McGraw Hill Ryerson. At the time I was working there as a bright eyed young executive. I noticed that every Thursday afternoon Charlie would shut his office door and make it clear to everyone in the company that he was not to be disturbed, except in the direst of emergencies.

Along with many others in the company, I was quite sure that he was grabbing a quiet afternoon nap. Then, over a drink at the end of a weekend planning session at his cottage, he finally disclosed that Thursday afternoons were his “alone time” sessions devoted to thinking about the company and how to make it better.

I was so impressed with the logic of devoting regular time to thinking and strategizing about the business that I adopted this as a model for myself. I began setting aside every Friday morning as a high priority meeting with myself. At the end of each week's meeting, I would decide the topic to be considered the following Friday morning. Then, I would take the next week to assemble the necessary background information for my upcoming weekly “alone meeting”.

Following each "alone meeting", I would follow up with others in the company to further explore issues and ideas that seemed worth pursuing.

This I can say with certainty. From the date I began to hold my weekly “alone meetings”, my business thrived as never before. Try it. I think you might be very pleasantly surprised at the dividends you will reap from this simple strategy.

Turning Principles into Profits

Have you given any serious thought to the “principles” that will guide you, and the rest of your company’s management team, in making the right decisions as your business grows? If not, here’s some food for thought.

Everyone lives their life according to a set of personal principles. These principles guide us in keeping on track and out of trouble when making life decisions. Examples include honesty, fairness in dealing with others, building a retirement fund, never running up credit card debt, etc. etc.

It’s the same with your business. Just as you lean on principles to guide your personal life ─ you also need a set of principles to guide you in making the right decisions for your business.
To be successful, every business must have one “key operating principle” that impacts all of the decisions made in every aspect of your operation.

So what is a key operating principle? Rather than try to define the word, let’s look at Wall Mart. This ultra successful company provides a real life example of the application of a clearly articulated “key operating principle” ─ and how this has a ripple effect in driving other “spin-off principles” that have led to the company’s remarkable success.

Wall Mart’s key operating principle is “we sell for less”. This is a seemingly "noble" principle that conjures up warm and fuzzy feelings in the hearts of cash strapped moms and dads who flock to their closest Wall Mart Store in ever increasing numbers in search of a bigger bang for every dollar they spend.

Through the consistent application of this “key operating principle” Wall Mart has become the world’s biggest company ─ and its 17th largest economy.

But, to operate within the framework of this “key operating principal”, Wall Mart must adhere to some very Draconian “spin-off principles” that are usually associated with 19th century sweat shops operating during the early stages of the industrial revolution.

For instance, in order to sell for less Wall Mart must keep its operating costs as low as possible. This fact drives an important spin-off principle for Wall Mart. “Pay employees the lowest possible wages and the very minimum in benefits”.

To operate within this principle Wall Mart will go to almost any length. For example, when the employees in a Quebec-based Wall Mart store went to court and won the right to organize a union, head office responded by simply closing the store. And, Wall Mart has been accused of restricting its employee's work hours per week to levels that legally exempt the company from paying benefits such as holiday pay and health care insurance.

And that’s not all. Wall Mart’s “we sell for less” principle also requires that the company treat its suppliers with the same hardnosed attitude meted out to its employees. Suppliers are regularly squeezed for lower prices and forced to meet strict shipping restrictions, extended payment terms, and the right to return goods that do not sell.

Now, I am not saying that Wall Mart is an evil empire ─ after all a corporation has no conscience ─ it operates in the best interests of its shareholders. And Wall Mart’s owners are probably more than satisfied with the profits generated by the Wall Mart Empire.

However, this is a very dramatic example that demonstrates the importance of setting a clearly articulated “key operating principle” for your company ─ and the implications this will have in determining compatible “spin off principles” for every aspect of your company’s operations.
For instance, if you are a retailer selling high-end sound equipment, and your key operating principle is to offer your customers top notch technical support and knowledgeable advice in choosing the right equipment, you cannot hire your staff at minimum wages. The principle driving your hiring practice will be to pay higher wages to be sure you get the best possible employees. If this hiring principle is not strictly adhered to, your business cannot live up to its key business principle, and it will likely fail.

OK, so where do you start to establish your company’s “key operating principle”.
Since all of your companies operating principles must be compatible, the key operating principle must provide clear direction in all business decisions that are essential for the company to achieve its business objectives. Here are a few examples of key operating principles.
(a) Selling at lower prices (b) Offering superior service coupled with higher prices (c) Offering premium products and services (d) Providing value products and minimal services

What is the image your company wants to project to customers? As you can see from the Wall Mart example, whatever decision you make will have broad implications for every part of your company’s operations.

What to do with a “key operating principle” when it’s established?
As soon as your key operating principle is set, examine what impact it will have on all other aspects of your company’s operations. Then make sure that everyone working in the company has a clear understanding of both the key operating principle the principles that naturally spin off from it. Together these principles will dictate your employee's every day decisions.
And there's something else you should keep in mind. Having well understood operating principles become more and more important as your business grows, and new people come into the company carrying operating principles from the companies they have left. Operating principles, brought along from past employers, may be in direct conflict with your company's principles. When this happens, trouble looms.

In summary
It is vitally important to regularly carry review of your company’s “key operating principle” and its implications on every aspect of operations. When you find inconsistencies, it is important that the relevant “spin off principles” are adjusted accordingly.

And remember, your employees cannot follow operating principles they don’t know about. Therefore, it’s a good idea to set out your company’s operating principles in written form ─ as they apply to each aspect of the company’s operations. And then, be sure these principles are clearly understood and followed.

Mission
My name is Ron Hume. As a hopelessly addicted entrepreneur, I am passionate about the business building process ─ and I hope to go on learning until I crumple into a lifeless heap over my laptop. At present, I’m very excited about the limitless and very lucrative business opportunities opened by the Internet ─ and I have interests in two online publishing companies.

As well, I offer a coaching and mentoring service to younger business owners and managers who are looking for experienced “been there” guidance in how to avoid major business sink holes and to scope out and evaluate profitable new opportunities.

Over a 40-year career, I founded a series of successful companies known as The Hume Group and built the business to have annual sales of $70 million. Before founding my own businesses, I served as a Group Vice President at McGraw-Hill Ryerson.

Because of my background, I understand the unique challenges faced by the management of early stage companies. Now, through this blog, I’d like to pass on some of what I have learned to younger entrepreneurs ─ in the early stages of business building.

One important lesson learned along the way is this. Building a successful business requires the combined expertise of many dedicated people ─ all working together ─ to achieve a common goal.

Because of this, I have invited a number of my friends from various specialized business disciplines to contribute articles to this blog. You will find their names and credentials in the column to the right.

As well, you are invited to comment on articles and to suggest topics where you would like to learn more. We’d also like to learn from you. Please let us know about your successes and triumphs.

As the entrepreneur in charge of your own business, it is your job to set the destination, recruit the crew, and then navigate your enterprise through the shoals to become a highly successful business. Then, we may give you some useful thoughts on how to sell your business on the best possible terms.

On my next post, we’ll discuss the importance of establishing clearly articulated operating principals for each sector of your business.