“The truth is that the first changes are so slow they pass almost unnoticed, and you go on seeing yourself as you always were, from the inside, but others observe you from the outside.” ― Gabriel García Márquez
If you place a frog in a pot of boiling water it will understandably scramble out pretty quickly. However, if you place it in a pot of water at room temperature and don’t scare it too much, it will stay put. If you then set the pot on a stove and gradually turn up the temperature, something very interesting happens.
As the temperature gradually increases, the frog will do nothing. In fact it will show every sign of enjoying itself. As the temperature continues to increase it will start becoming groggier until it no longer has the strength to climb out of the pot. Though there is nothing physically restraining it, it will sit there and boil. The frog’s psychological apparatus for sensing threats is geared to sudden changes in its environment, not to slow gradual changes. In psychology, this phenomenon is called sensory adaptation. The frog’s ability to adapt to the slowly increasing temperature is definitely not a good thing for it in the long run. But is this not how a lot of change creeps up to us in life? Change is in fact more often than not slow and gradual rather than sudden.
In helping businesses deal with change, I have discovered this phenomenon repeated – we get accustomed to terrible situations and don’t realize how hot the water is getting. If we were to describe our current situation to a 10 years younger self, our younger self would probably be shocked beyond belief. Why do we stay in water that is approaching the boiling point? Is it because it is a lot more difficult to look inside and self evaluate? Quite often it takes someone from the outside to see the gradual change building up and awaken the slumbering entrepreneur. Sometimes however, we fear that any attempt to jump out of the water will land us straight into the fire.
We are paralyzed by the prospect of change. So, instead of jumping, we tread water hoping that the heat will soon stop. Is it risky to try to change the environment or jump out of the pot? Or is it riskier to continue to adapt to the increasingly unpleasant environment? We will not avoid the fate of the boiled frog until we learn to slow down and see the gradual processes that often pose the greatest threats. We need to constantly question how comfortable we are and whether the situation is good for us and our business.
What kills the frog is not the boiling water but its own inability to decide when it had to jump out. We all need to adjust with people and situations, but we need to rethink when to adjust and when to change the situation. There are times when we need to face the situation and take the appropriate action. We have to decide when to jump. Deciding not to jump is also a choice. Blaming the water for changing around you is pointless.
How much do you earn from your business per hour? And how much do you charge out? Unless you are in a business charging per hour, this might seem hard to know or even irrelevant. And even if you do charge an hourly rate, chances are that not all your hours are billable.
Most business owners never think of how much their time is worth per hour. This leads to the fallacy that you save more money in the business by doing stuff yourself and not hiring an extra hand. Here’s a simple calculation – If your profit after tax (and before you take any money out of the business) is £50,000 for the year and you are working 50 hour weeks, with a couple of weeks of holiday every year, your per hour rate is only £20 (£50K/ 250). Now the interesting questions – What should you be doing which earns you more than £20 per hour for yourself? If you went looking for and found a new key customer, how much will they be worth over the next few years?
How many hours of work would that take and what is the difference on a per hour basis? If you look at the value of time recruiting a new member of staff, training staff to be as good (and valuable) as you, what is the per hour return of this effort? Most business owners agree that these are all incredibly high-value activities… but then they tell me they don’t have time to do them! It’s not rocket science – the higher the value of the work that the business owner does, the more profitable the company. What should you not be doing to make sure your per hour rate does not decrease further? Make a list of all the things that you spend an incredible amount of time on each week.
These could be answering the phone, doing quotes, manning the counter, bookkeeping, administration etc. Against each activity, write down what you could pay someone hourly to do this. If the hourly rate is less than you can be worth when doing your most valuable work….employ someone to do the lower-paid work. The question is not “Can I afford to employ someone?”, it’s “Can I afford to not employ someone?” As a business owner, you have a remarkably high level of control over your level of income. Why then would you choose to do minimum wage work? You need to pay someone else to do the lower value work so that you can do the more valuable work and earn more money for the business.
Take action. Make a list today, identify one thing that you can outsource and ask your coach or other trusted adviser to recommend someone to give the work to. Don’t do work with a lower hourly rate than you could be doing. Identify one item which is the clearest high value work in your business. Make time for this at the expense of the low value work. If you focus on using more of your time to earning a higher rate per hour, your business will be more profitable – or you’ll be able to work less hours – whichever is more important to you. Which brings us to another set of interesting questions – How much per hour would you pay for extra leisure time? How much per hour would your partner/ child pay you for an hour of your leisure time? Is £20 per hour worth the sacrifices you make?
I received a mail today from a client’s employee which reminded me of an old story that had puzzled me when I first read it and continues to puzzle me today in very different ways.
It is the story of Bartleby, the Scrivener, by Herman Melville.
In the story, an elderly Manhattan lawyer employs the forlorn looking Bartleby. At first, Bartleby appears to be a boon to the practice, as he produces a large volume of high-quality work. One day, though, when asked to proofread a document, Bartleby answers with what soon becomes his stock response: “I would prefer not to”.
Soon he is doing fewer and fewer tasks around the office and despite several attempts to reason with him offers nothing but his signature “I would prefer not to”. After a while, Bartleby stops working completely. Tension gradually builds as the lawyer’s business associates wonder why the strange and idle Bartleby is ever-present in the office – he is now even living there.
Sensing the threat of a ruined reputation but emotionally unable to throw Bartleby out, the exasperated lawyer finally decides to move out himself, relocating his entire business and leaving Bartleby behind. Soon the new tenants of the old space start trying to unsuccessfully evict Bartleby until he has to be forcibly removed and imprisoned.
Towards the end of the story, despite access to plentiful food, Bartleby is found dead from starvation, having apparently preferred not to eat.
What really causes our employees to close themselves to change and to Action? How may times do our team members imply “I would prefer not to” and then don’t do something even after committing to do it. Does this attitude in a team reflect on the leader’s own attitude and attributes? Why does a business owner close himself/herself to new ideas and fresh thinking that could massively improve their business? Who really loses when this happens?
In the lonely job of the entrepreneur, why would we choose to not work with others creating win-win scenarios and making a difference bigger than ourselves?
In a recent conversation I was having with a fairly successful business owner, we started talking about some of the goals he had for himself and his business when he first started and how they compared to his goals today.
As we discussed how his thinking had evolved in the 10 years he had been in business, we realized that as he had achieved one measure of success, time had also taught him to compromise on his bigger goals and ambitions. He felt comfortable where he was in his business and was loathe to overextend himself or his business to drive further growth. How many of us reach that plateau in life and in business?
We convince ourselves that what we have is good enough and there really is no point in trying to relive our dreams. Those dreams were of a forgotten youth when we didn’t understand how the world worked. The passion, energy and drive that first got us started in business and saw us claim success after success seem to be a thing of the past and long forgotten. What happens when you face the truth about what your business could really achieve if you started rebuilding it with the same passion, energy and drive that you first had. Only this time you also add to it the years of experience and best practice you have accumulated and the strategies that have worked for thousands of other businesses across the world?
In The Matrix, Neo (Keanu Reeves) is introduced to a mysterious man named Morpheus. Morpheus talks about the Matrix and the truth that Neo is just a small part of the Matrix and one of the Matrix’s “slaves”.
Morpheus then presents Neo with 2 pills, a blue pill and a red pill, and explains a choice to Neo: “This is your last chance. After this, there is no turning back. You take the blue pill – the story ends, you wake up in your bed and believe whatever you want to believe. You take the red pill – you stay in Wonderland, and I show you how deep the rabbit hole goes. Remember, all I’m offering is the truth – nothing more.”
So the question for the business owner/ entrepreneur is whether reality, truth, is worth pursuing. The blue pill will leave us as we are, in a life consisting of habit, of things we believe we know. We are comfortable, we do not need truth to live. The red pill symbolises passion and drive along with risk and questioning the status quo. It forces us to ask ‘What if?’ and ‘Why?’ Asking these questions ultimately leads us to a choice. Do you continue to ask and investigate, or do you stop and never ask again? Neo chooses the red pill. Which one would you choose? Click on the red pill to get in touch with us for a complimentary strategic review of your business.
In 1996, a 20 year old Tiger Woods was named Sports Illustrated‘s sportsman of the year and the PGA Tour Rookie of the Year. In 1997, he won his first Masters with a massive 12 stroke victory at Augusta, becoming the tournament’s youngest ever winner. Then he changed his swing!
He called in Harmon, his coach, and told him that his swing was too reliant on timing. “Anybody can time their swing for a week, but I want to do this for a career,” he said.
Tiger wanted to build a system which would work under the extreme pressures of a world championship. “When the pressure’s on, good mechanics will overcome nervousness. At the same time, the guy who has good mechanics will get less nervous because he knows the other guys will break down first.”
Throughout 1998, Tiger Woods struggled and won only once. Still he stood by the new swing he was learning and practicing. At the Byron Nelson in 1999, Woods famously signalled what was to come with a phone call to Harmon from the range. “I got it,” he said.
Between 2000 and 2002, Woods won 19 times on the PGA Tour, with six majors, including a stretch where he won four majors in a row; the so-called “Tiger Slam.” Golfers today often talk about Woods’ Harmon swing as one of the greatest swings in the history of the game.
There are several ideas in the above story that apply to businesses. Here’re some that stand out:
Critically examine your success
Ask yourself what really has made your business successful. Often, business owners tend to look for reasons for whenever they fail and spend an incredible amount of time identifying the things that the business should not be doing. When things work however, they peg it down to their superb sales/ entrepreneurship/ creative skills. You need to constantly ask yourself what the actual reasons for your success are and how easy they are to replicate.
No business is immune to change. For a business’s long-term survival it is important to take a step back and re-evaluate how you deliver your core product/ service and message.
You can either reach acceptance through the cycle – Denial, Anger, Bargaining, Depression, Acceptance – or simply start there. Accountancy as a profession changed relatively little until the introduction of computers. Now as cloud based finance systems revolutionise the market, the profession is throwing up massive opportunities for those willing to embrace change.
Plan for change
The first step is to recognise the need for constant change. Every year, if not every quarter, set aside at least a few hours to analyse your business and the potential and likelihood for change. One of the oldest and most established tools for doing this is a SWOT (Strengths, Weaknesses, Opportunities and Threats) analysis. Look at what your customers and competitors are saying and doing. Ask your suppliers for input. You’ll be surprised how much competitive information they would have. Go online to research what people are saying about products and services similar to yours. When was the last time you googled for ‘I need a [your product]’?
Create a specific plan of action to implement the change. Remember that people rarely like the the idea of change, so there will always be a lot of pressure to keep things as they are and hope for the best.
Stick to the Plan
Often in every process of change, there is a dip before the really steep climb begins – in profits and in motivation levels. Remember that failure and success are not on two ends of a scale – they are at the same end of the scale – failure is right before success. The successful businesses are those that exhibit ‘grit’ in their pursuit of their goals.
Play for the long term
Pick the top things that you believe have worked for your business since inception, or for the last 20 years. Then list 3 reasons that threaten each of these things not working in the next 3 years. Build your business with the end in mind – robust systems and a good team should be running the business when you are ready to retire/ move on. If you are the majority of the strength that keeps your business alive, you need to rethink your business swing!
Seek Best Practice
Often, business owners are so ingrained in their day-to-day, that they miss out the forest for the trees. The complimentary strategic business review we offer is to help you take a step away and look at your business alongside a business coach to identify areas and strategies where you can start the process of small and massive improvements. Drop us a line and someone from the team will get in touch to schedule this with you. Change your swing, then do it again!