In 2007, at the tender age of 25, I made the leap from a background in strategy consulting, corporate management, and SME management, to starting a business. Driven by a passion to solve the unemployment crisis in South Africa, I launched Edge Growth to help entrepreneurs grow their businesses fast.
In 2008, we built our corporate advisory business, to help large South African corporations grow their suppliers. In 2009, I handed that over to start building our second business unit, an SME investment business. We raised capital from a bank and started a fund to provide risk capital to high-growth businesses.
Related: Are You A Calibrator?
Trying to grow through the financial crisis
The timing was awful, coinciding with the global financial crisis and recession of 2008 to 2010. All banks were under immense pressure and that pressure translated directly into highly stressed executives placing immense pressure on us.
At one point, we were given an ultimatum to achieve totally unrealistic targets or we’d be fired (resulting in our business being shut down). The pressure was unbelievable. I felt like I was gripped in a bear hug, inside a pressure cooker, at the bottom of the ocean. I was sleeping two to three hours a night and was chronically hyper-anxious.
Could you be the problem in your business?
Increasingly, I realised my team hated working with me. The pressure was breaking down trust and we were constantly in conflict. Team performance took a dive, and good people left. Slowly I had to confront the reality that it was me. It was my fault. I was the problem. It’s not easy realising the biggest problem in your own business is you.
The level of leadership required under the circumstances had outgrown me. I had become the main constraint to our business.
Nearly a decade later, with a few honorary degrees from the school of business building (plus a litany of battle scars) under my belt, it’s become obvious to me that the experience was inevitable. Building a business is tough, full stop. But I was also building a fund for the first time and building a business for the first time. I was an executive with zero support structures (unlike in corporate settings) for the first time. I was figuring things out along the way and frankly, at the age of 30, I had a lot to figure out.
You need more skills to experience prolonged growth
The problem is that 18-hour work days don’t give you much room or time to think about yourself, your business or where you need to improve and develop. Growing rapidly under those circumstances, it was inevitable that I’d discover the ceiling of my business management ability was too low. I’ve since learnt that this is true of almost all entrepreneurs scaling a business fast, for the first time.
Over the years, I’ve seen the same pattern playing out in most of the fast growing businesses we invest in or advise: The business outgrows the leadership and the CEO or top two to three people become the biggest constraint in the business.
It was through my own painful experience — and that of other CEOs I walked the road with — that I learnt the painful lesson, what got you here, won’t get you there.
Keep upskilling yourself to continue your business’ growth
The skills and disciplines that made you successful up until now and created your current opportunities, are insufficient to make you successful in those opportunities. As a business grows, the skills required to run that business change, and get increasingly difficult to build.
Most entrepreneurs don’t have the skills to run a larger, more complex organisation beyond a 20 to 50-person headcount. These businesses take a lot of time and effort to build, and the owners are so trapped in the hyper-pressure vortex of day-to-day business that they do nothing about gearing up their own management capabilities to match the needs of a scaled business.
Soon enough, the business ‘gets stuck’ in No Man’s Land, constantly repeating a chaotic fight for survival, because its complexity is just too much for the level of managerial competence.
Seeing this pattern play out painfully in business after business has convinced me that the single biggest constraint to economic growth and job creation in South Africa is this issue: CEOs in fast growing businesses becoming outgrown by their successful businesses.
I’m so passionate about this issue I’ve launched a new business to solve this problem. It’s called The 10X Entrepreneur. Our mission is to help founders 10X themselves and their teams, so that they can 10X their businesses.
4 Key tips to scaling a company
If you’re scaling a company for the first time, here are my key tips:
- Study business scaling. Jim Collins and Jack Welch books are great. An MBA is useful, but they are woefully inadequate for the job of scaling a business from the ground up. Know the specific journey of scaling a business: The crises, transitions, and what it means for your job as a leader.
- Focus on your skills. Implement an accelerated personal growth system to build your Scale-Up CEO skills – See Are You (Realistically) Ready To Scale Your Business
- (Carefully) add competent executives to your senior team. Building critical mass of executive management competence radically accelerates your own growth as a competent entrepreneurial executive. Make sure they are the rare breed that thrive at building from the ground up, not just running organisations that are already built with procedures in place.
- Make the building of great management systems a primary priority. Learn by doing. But get the help of consultants. Learn from gurus in a quasi-one-on-one coaching relationship and attend business bootcamps.
What A Grade 1 Sticker Business Taught Me About Business
It’s the very fundamentals that are frequently overlooked amid ambition and “blue sky thinking” – yet, these remain the most crucial element of any business.
When I was a kid, my father believed that instead of getting pocket money, my brothers and I should learn how to make money. Stickers were the school craze when I was in Grade 1, and we wanted a collection for ourselves, so Dad said if we wanted to buy the stickers, we needed to make the money. So, logically, we started a sticker trading business. Dad gave us the start-up money and took us through the basics of business.
We had a cash float for purchases, and learnt about cost price, mark-up and selling price – very basic accounting. We kept recycling that money, making extra and using it to buy more stickers. Then we worked out that if we increased the mark-up, we’d make a bigger profit – so why not make the mark-up as big as possible? The obvious happened. Our prices were too high, and we lost customers.
Valuable business lesson learnt, we came back down to a mark-up that other kids were willing to pay for.
More lessons to learn
Then people came to us and asked if they could take a sticker today and pay us tomorrow. We saw no reason not to trust them. Guess what? They didn’t pay us back. We had bad debt on our hands. When we sold out of stickers, we had cash-flow issues and couldn’t buy more stock. Dad was there to help us out, though, so we received another capital injection to get back off the ground. And this time, if we did extend credit, we loaded it for the privilege of “buy now, pay later” – another lesson learnt.
We ran a proper ledger for the business, tracking our inventory, sales and profit. Even if our “bank” account was a piggy bank, we had a clear record of what was going on. When I look back on it, none of what I learnt was irrelevant.
Today, I run a leading financial services company with billions of rand running through our bank accounts. Even though the finances of the business are run on a much larger scale, the principles of business – those basic principles that we learnt trading stickers – still power our company. And when I see entrepreneurial ventures failing, or when friends come to me for advice because their business is struggling, it’s almost always because they haven’t got these basics right.
One of the most important lessons I’ve learnt is that if you don’t fully understand how the money is being made, walk away. Whether you are dealing with stickers or financial services, the business principles should be straightforward: money coming in, money going out, and profitability.
Every day, I look at an Excel statement of my company’s forty bank accounts. Every day, I look at the cashflow, and unusual big-ticket items get a note so I know what’s going on. It’s just like that Grade 1 business, only on a bigger scale.
Once the other kids saw the success of our sticker business, they started to want to get in on the action, so they came to market with their own competing products. At first, we were able to innovate as the competition squeezed our margins and started to impact on our profits. Eventually, the whole situation got completely out of hand and the school banned sticker trading for profit.
While I didn’t become a sticker magnate, the lessons I learnt in Grade 1 remain central to every business I am involved with – get the basics right.
How To Handle A Director Who Always Says No
Diverse opinions on a board is a good thing — but is it boosting your business, or hindering growth and decisions?
Do you have that director on your board who always says ‘no’? Regardless of what the issue is, regardless of the context, who raises it or whether or not it is indeed a good idea, their response is either a simple ‘no’ or an elongated perspective on why they disagree? It can even feel at times that they are actively working against the company and against the board. Although they obviously do not see it that way.
Experienced directors will have multiple war stories related to this subject. Aspiring directors should be aware of how to approach these situations when they arise and how to avoid becoming the subject of such stories.
Develop a culture of trust, candour and professionalism
A board’s conduct must be characterised by trust, respect, candour, professionalism, accountability, diligence and commitment. It is the board’s collective responsibility to build this culture and to engage with one another in a productive and effective way.
Dissent should be welcomed when it is constructive and engaging. The idea of being the ‘devil’s advocate’ for the sake of it however, is not the best way to approach this. Dissent should be based on a real belief that the issue has not been fully debated or creates a real challenge for the company going forward.
If you have a director who genuinely believes a different path is right for the company, hear them out and engage in the discussion. In my experience, this often opens up an issue or changes a detail that when taken as part of the whole, improves the decision-making outcome for the board and the company.
Related: Contributing In The Boardroom
Remove the politics from the boardroom
At the heart of this issue is often politics. Politics between directors, who are also shareholders or executives. Politics between the ‘new guard’ and the ‘old.’ Regardless of the genesis, politics really do not have a place in the boardroom and directors who engage in it should be called out by the chairman or another senior director.
In local government I have heard stories of councillors who always vote ‘no,’ so that whenever something goes wrong, they can say “I told you so,” and show the public why they should be re-elected. But that is indeed politics. The boardroom is a very different space. It is private and discussions should be confidential.
Board rotation, a simple solution
While the removal of an errant director should never just be left to resolve itself, there is a simple solution that can support the easy removal of the most difficult directors. The challenge is that it requires forward planning prior to the appointment of any new director.
Directors should only ever be appointed for a predefined term, with automatic rotation at the end of that term. This does not stop you from reappointing a director for a further period. It is, however, always easier to ask someone to consider a further term than it is to tell them that their time has come and they should resign from the board.
Having a predefined term for a director essentially ensures an automatic resignation period. A simple rotation policy for directors is not just good governance, it is a practical step you can take to provide a way out of a sticky relationship.
Ultimately the board as a whole must address issues that detract from the board fulfilling its function as and when they arise. A rotation policy might provide an effective backstop. A high-performance board is one that will tackle the issue head-on.
Read next: How Diversity Drives Board Performance
The Power Pose: Using Body Language To Lead
Use the way you move and stand and interact with others to become a better entrepreneur and leader.
In 2012, the power pose became a global sensation. A Ted Talk by Amy Cuddy hit a staggering 46 million views and became the second most popular Ted Talk in history. The premise was simple – hold a powerful pose and it will not only affect the way you behave but it will even change your body chemistry. Since the talk, the power pose has met with heavy criticism and been labelled as nothing more than pseudoscience. Fortunately for believers, they were proven right. Amy Cuddy released further research this year and it fundamentally proves that this bold stance works exactly how she said it did back in 2012.
The power pose isn’t something that you’d adopt in a meeting or around the office but the science behind it shows how important it is to pay attention to your body language as it can fundamentally change how you are perceived.
Notice how you are noticed
People spend a lot of time reading one another’s body language and the way a person stands or holds their hands or moves can influence how others see them. It’s very natural to judge someone else’s posture, but what about the way they are judging yours? Few people look at how their body language is affecting the way people engage with them.
So, what are you supposed to do?
Fake it until you make it
Want to know how can you adapt to become a better leader? You can fake it.
The power pose isn’t the only way to change your mood. Research has shown that whether you laugh naturally or put on a smile and make yourself laugh, your body still releases the same levels of serotonin.
Whether you are really laughing or just pretending to laugh doesn’t matter – they both have the same impact on your demeanour.
Change how others see you
Think about the pose that every athlete adopts when they win a race or achieve something that’s been physically taxing. They hold their hands outstretched in the air. Even blind athletes hold the same pose. It’s big, it’s bold and it’s a physical manifestation of success.
Now consider the defensive pose. The tight hunched shoulders or inward curve of the spine. These poses immediately make a person look nervous, afraid and lacking in confidence. Like the porcupine curling in on itself for protection.
The same ideas apply to daily business life. While the power pose and the athlete pose are not necessarily a team activity, ensuring that you hold your body upright and with confidence means that you’re conveying an attitude of strength. You come across as confident and capable and positive. You are ready to take on anything and overcome the odds.
By contrast, if you are hunched and withdrawn, you come across as nervous and lacking in confidence and these are not the qualities you want associated with you as an entrepreneur and a leader.
Body language for entrepreneurs
- Shake hands like a hero. The way you shake hands with someone is very significant in terms of establishing equality. Be even, be firm but don’t pull people towards you or turn their hands under your own. This makes them feel like you are trying to establish dominance.
- Create an atmosphere of openness. Maintain eye contact, say hello to people with warmth while holding a strong posture. A warm and open greeting is essential to establishing trust.
- Do the power pose for two minutes before any meeting or interview. This will get those chemicals stirring and make you feel confident and in charge.
Entrepreneur Profiles2 weeks ago
8 Codes Of Success That Helped Priven Reddy of Kagiso Interactive Media Achieve A Networth Of Over R4 Billion
Technology2 weeks ago
3 Things Africa Must Get Right If It Wants To Leapfrog Into The 4th Industrial Revolution
Lessons Learnt1 day ago
What Comfort Zones? Get Comfortable With Being Uncomfortable Says Co-Founder Of Curlec: Zac Liew
Business Ideas Directory2 weeks ago
10 Cannabis Business Opportunities You Can Start From Home
Business Landscape5 days ago
How Schindlers Attorneys Became Involved In The Landmark Cannabis Case
Branding1 week ago
Why You Should Prioritise Brand Image
Get Organised4 days ago
How To Multitask Like Tim Ferriss, Randi Zuckerberg And Other Very Busy People
Increasing Productivity1 week ago
Take Responsibility For Your Company’s Culture To Boost Productivity