The Growth Leader – Volume 13
We hope you’re Planning, Growing & Succeeding!
We realise there’s a fair bit of noise out there at the moment:
- Rising oil prices
- Rising inflation*
- Rising interest rates
- Growth slowing
And naturally, talk is starting to turn to: “Are we heading back to some sort of version of 1970’s-style stagflation?”
Maybe. Maybe not. But in reality, that’s not the question that matters.
Because whether we call it stagflation or something else, what we’re actually seeing on the ground is this: Pressure.
And pressure has a funny way of doing one thing really well. It immediately exposes how well (or how poorly) a business is being run.
Loose pricing gets exposed. Bloated cost bases get exposed. Lack of clarity and strategic direction gets exposed.
So, this month isn’t about trying to predict the economy. It’s about asking a much better question:
“How strong is our business. Really?”
So, without further ado, let’s hop right into it…
*PS: as a little bonus this month, hear from the provider of this month’s quote, Milton Friedman talking about the Magic of Prices here. Maybe give this some thought in the context of the Strait of Hormuz and the current oil price…
Margin Pressure – The Slow Leak That Kills Business
Most businesses don’t fail over overnight. They bleed out slowly.
Costs creep up. Prices don’t quite keep pace. Margins get thinner… and thinner… and thinner.
Until one day, there’s nothing left.
That’s what we’re seeing right now in a lot of SME’s. Not outright disaster, but the slow leak of compression. Diesel prices, Urea, Building products, etc.
Growth isn’t a moment. It’s a system… built deliberately over time. If your margins are under pressure, the answer isn’t “sell more.” It’s “fix the system.”
Where in your business are you busy being busy… but not actually making money? Where are your margins feeling pressure – and what are you doing about it?
Strategy Isn’t the Problem – Focus Is
When things get tight, most businesses don’t simplify. They do the opposite. They add:
- More ideas!
- More initiatives!
- More “strategic conversations!”
And suddenly no one knows what actually matters?!
Many strategies become a “mish-mash” of activity instead of a clear direction. And if everything is important, nothing is.
Could your team clearly explain your strategy in 30 seconds? If not, that’s where work is needed.
Ownership – Where Most Leaders Get Found Out
This is the big one.
When pressure hits, leaders tend to go one of two ways:
When pressure hits, leaders tend to go one of two ways:
1. They take elite ownership of the matter at hand; or,
2. They start explaining:
- “The market’s tough.”
- “Clients are slow.”
- “Costs are out of control.”
- “Insert excuse here.”
Whilst these all may hold some fact in some way, shape or form, none of them actually move the needle.
Great leaders don’t blame circumstances. They own outcomes.
And ownership isn’t about blame. It’s about control. The moment you own it you can do something about it.
Where are you explaining results… instead of owning them?
And Last, but not Least, The Bit Most People Don’t Want to Hear
This environment won’t reward:
- Busyness. Activity without plan is just coloured-in noise.
- Hope. Hope is not a strategy – it never was, and never will be.
- “We’ll see how it plays out” is just another way of putting your head in the sand, which as we all know, never solved anything. Ever.
It will, however, reward:
- Pricing discipline
- Cost control
- Clear thinking
- Upfront, honest, transparent communication with stakeholders (customers, staff, investors, community, etc.)
- Strong leadership
It doesn’t mean that you have to have all the answers – no one does. It does, however, mean that you need to be asking the right questions. The uncomfortable truth is this: Some businesses will get stronger through this, whilst others will get found out.
The Leadership Question This Month
After the positive feedback and success of asking a ‘Leadership Question’ last month, we’ve decided to make it a permanent feature of our newsletter.
That said, as you look at your business right now:
✅ Are your margins where they should be?
✅ Is your strategy actually clear?
✅ Are you leading with ownership, or explanation?
Because this cycle is testing one thing: How well you actually run your business.
A Thought to Leave You With – Our Board of Advice Program
The above questions, and more are the precise topics we workshop with our clients in our Board of Advice Program – our fastest growing service at 4Front – and if you don’t currently have a forum where these conversations are happening regularly, that’s got to be the first thing to fix this month.
Because the reality is, the right decisions rarely come from thinking harder – they come from thinking better, with the right people around the table. That’s exactly what our Board of Advice Program is built to provide.
If you think a Board of Advice Program may benefit your business, or if you want more information on our revolutionary program, get in touch with us by booking a 4Front® Discovery Session here.
Until next time, keep Planning, Growing & Succeeding!
Let’s build a future you can look forward to. Call us at (07) 3875 9888 or visit www.4front.net.au to get started today.