Sometimes It’s Good To Be Bad Says Sirdar Group CEO

Sometimes It’s Good To Be Bad Says Sirdar Group CEO

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Vital Stats

  • Player: Carl Bates
  • Company: The Sirdar Group
  • Established: 2007 (2008 in SA)
  • Visit: sirdargroup.com

Sirdar has developed a reputation for being very good at putting together high-performance boards for private companies. But for a long time, that wasn’t all it did. As is the case with many growing companies, Sirdar started offering clients associated services as time went on. For example, the company started offering a legal service — an obvious extension of its existing offerings.

In March 2014, Sirdar was also in the process of considering launching a new accounting service — something that had been on the cards for a number of years. Something happened, however, that fundamentally altered the company’s expansion plan.

Related: Contributing In The Boardroom

Sirdar Global CEO Carl Bates attended a talk by Professor Frances Frei of the Harvard Business School. What she said had a profound impact on him.

Be unapologetically bad

“Professor Frei explained that the number one obstacle to excellence is the desire to be great at everything. You can’t be great at everything, and you can’t be better than your competitors at all the things you do. So, the answer lies in being willing to be bad at certain things in the service of overall excellence.

“You have to be great at some things, and unapologetically bad at others. The alternative is simply being mediocre at everything,” says Bates.

Bates realised that Sirdar’s approach to growth needed to change. “We had a strategic meeting in April, and once I had shown my colleagues a video clip of Professor Frei’s presentation, we agreed to stop offering legal services,” says Bates. “We also decided to stop developing our accounting service.”

 

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A half-measure

Carl-Bates-

After taking these initial steps, though, the process of transformation within Sirdar stalled. Sure, the argument made sense in theory, but putting it into practice was hard. The thought of purposefully turning off revenue streams just felt, well, wrong.

“By deciding to cancel existing services you’re effectively saying ‘no’ to money,” says Bates. “This can be difficult to do — and difficult to explain to stakeholders. Frei’s theory is simultaneously logical and counter-intuitive.”

Sirdar kept toying with the idea of focusing its operations on what it did best, but Bates and his team remained hesitant to pull the trigger and aggressively implement the strategy. In fact, it was not until late 2015 that it was decided to jump in with both feet.

“We realised that we weren’t truly adopting the strategy on an operational level, and it was costing us,” says Bates. “By spreading ourselves too thin, we weren’t being the best we could really be.”

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Staking a claim

The Sirdar team asked themselves a simple question: What could they be truly great at? Could they offer class-leading legal services? No, they weren’t a law firm. Could they offer the best accounting service around? No, they weren’t an accounting firm.

Could they be the best when it came to the implementation of high-performance boards? Yes, they could — this was where their strength truly lay. It was time for Sirdar to become unapologetically bad at certain things in the service of becoming great at another.

“You need to try and narrow the category in which you operate as much as possible. You need to identify that very specific niche in which you could be a real leader, and then stake your claim,” says Bates.

Turning off the taps

Turning off revenue streams will always sting a little, but Sirdar immediately saw the benefit of this approach.

“Management suddenly had more time to operate at a strategic level. By cancelling certain services, there was more time to focus on the direction of the company,” says Bates.

The company also found that it could now more easily enter into strategic partnerships with other organisations.

“We had been working with partners for a while, but there had always been limits to these partnerships, since our service offerings had encroached on their areas of operation. With the conflict of interest now gone, there could be greater synergy between the companies,” says Bates.

The innovator’s dilemma

What advice does Bates have for businesses wishing to implement this sort of strategy?

“By their very nature, entrepreneurs are innovators. They’re always busy developing something new. So, the key lies is applying that energy to the operational side of things — to focus on things such as customer service and product delivery,” says Bates.

Related: How To Create A Focused Board

And what if you’re not interested in the operational side of things?

“Bill Gates is a good example. He made himself the Chief Software Architect at Microsoft, and not the CEO. You have to ask yourself: Am I the innovator, or am I the CEO? If you’re the innovator, you need to find someone who is great at running the company.

“I’m another good example,” says Bates. “I don’t run Sirdar on a daily basis. I’m more of an innovator — I focus on governance methodology and building our external relationships. But even though I focus some of my time on innovation, I make sure that this innovation stays within the parameters of our core focus.”

Remember this

Do not try to be all things to all people. Diversifying and branching out can be a good thing, but it can also cause you to lose focus and give up your competitive edge.

GG van Rooyen
GG van Rooyen is the deputy editor for Entrepreneur Magazine South Africa. Follow him on Twitter.