Do you have a growth mindset?

What does it take to grow a business?

• Good operating procedures? Yes.
• Adequate working capital? Yes.
• A capable and engaged team? Absolutely.
• Effective marketing and a sales team that convert? Almost always.

We could keep going down this list. It’s a big one. But there’s one thing I like to see at the top of the list when we start working with a new client.

It is a growth mindset.

A growth mindset describes the mindset of a business leader that is all about growing and expanding the influence and reach of the company’s mission. This isn’t easy. It is pretty much the opposite of running the company by the bank balance and trying to maintain the status quo. But at the same time we aren’t talking about raising a million dollars. We aren’t talking about landing a six figure sales contract. We aren’t even talking about having a specific level of technical expertise or experience. We are talking about a mindset. And that is a place where everyone can start. What does this mean in practice.

To grow a mission you have to have one. Your company has to do what it does for a reason that goes beyond money or profits. Think I’m crazy. Look at any iconic, long standing, successful company and you will find that the mission existed long before the profits ever showed up. This isn’t a coincidence. Growth of mission guarantees growth of profits. But growing profits without a sustaining mission is usually either happenstance or a short term affair.

Assuming a mission exists, the push to grow it, the growth mindset of the leader that is driving everything forward, creates a positive level of stress in the company that does several things.

Positive stress and evaluating competency

Growth creates lots of opportunities to see whether people can rise to the occasion when challenged. It forces them to develop new skills and abilities to meet the growing responsibilities entailed in their job descriptions. Without growth sub par performance can stay below the radar and go unnoticed. During periods of growth even star performers will struggle and occasionally fail. There is no other way to develop and get better.

Positive stress and culture

Growing companies are crucibles of culture. They are intense and sometimes stressful environments where people must hammer out interpersonal and relational differences while accomplishing a common goal. A hallmark of growing companies is either self destructive, dysfunctional, acerbic cultures (e.g. Uber) or empowering, supportive and familial cultures (e.g. Zappos). If you want your culture to improve [articulate and define your values then] adopt a growth mindset focused on growing your mission. Some of the trivial interpersonal issues on your team will fade to grey as people have something more important to spend their time and energy on.

Positive stress and priorities

Parkinson’s law states that work expands to fill the time available for its completion. The same is true of priorities. Without an overriding push to grow that requires focused effort we fill our todo list with 100 meaningless tasks. But faced with expectations and goals and deadlines we suddenly find that just a few things rise to the top and become priorities.

The same is true of individual roles and responsibilities. Each person on your team has a highest and best use, but without a growth mindset there is no need to focus effort and energy on the things that are most valuable to the company’s forward progress. Growing business have more opportunities to put people into areas that use their unique gifts and skill sets. Status quo businesses have fewer areas where excellence is required.

The Growth Mindset in the Family Business

Family businesses in particular run the risk of underperforming if they don’t have a growth mindset. The stakes are higher for them than for other businesses. Why?

In a family business simply trying to maintain the status quo there are only so many opportunities for leadership, for skill development, for management opportunities, and even for ownership. We find that without a growth mindset the culture in family businesses is often apathetic and it’s not hard to understand why. You’re basically working with a group of people who have resigned themselves to sitting in second place. The presumption is that all of the good spots will go to kids or siblings or nieces and nephews. The business isn’t growing so I just have to be satisfied with where I am.

But in family businesses focused on growing the mission over generations of leadership and ownership there are untold possibilities for future advancement, leadership and personal growth. The family business owner, more than any other, has a responsibility to grow mission so that non-family members get a shot at contributing to the fullest.

Proof of a growth mindset

How do you know whether you have a growth mindset or not? Simple. Do you have a plan? A growth mindset is a commitment that you are going to grow the company. That commitment is on paper where others can see it, critique it, build it out, be held accountable to it and measure progress.

Without a plan it is a wish.

If you want to change the world grow your mission. If you want to grow your mission start building the plan today. Then tomorrow, get to work.

Two Ingredient Recipe for Growth

If I were to ask you what the two most important ingredients for growth in business are, what would you say? Think about it for a second.

You’re probably thinking about sales, efficient operations, better marketing, great customer service, or better employees.

Though these are often present alongside growth they are not the driving force behind growth. The two most important ingredients for growth are a compelling vision and clearly defined values. Although these are intangible, they are respectively, the destination you grow towards and the solid foundation that will support all that growth.

But what is vision? And what are values? Definitions for these vary depending on who is giving the answer. So here’s how we define them at Axiom, in a practical way that actually works to drive small business growth.

VISION

A statement of the projected future of the organization and its place in the world as defined by the leader.

In its simplest form, your vision is the picture you paint me of what your business will look like down the road. What are we trying to get to? The clearer the picture, the more practically useful your vision will be in your business.

What makes the vision statement important? It unites your organization around a common purpose. It provides a “north star” that every department in your business can use to evaluate decisions and performance.

For example, though sales growth is a great contributor to business growth, how much sales growth is necessary to meaningfully progress toward the vision? Is there a goal your team should aim for? Where [what geographic area] should they focus on growing? What products and services should they lead with? Where should the pricing be? With a clear vision the answers to these question come easier.

What qualities make up a good vision? We’ve written on vision before and you can read all about our thoughts on what makes a good vision, here. But if you want the summary version, a good vision statement must meet these criteria:

• A vision statement is a communication tool; the projected future should be clear.

• Some of the best vision statements contain a number or something that can be objectively measured. Numbers are the easiest way to provide clarity about what your future organization looks like. “We want to be philanthropic,” and “we want to be able to donate $150,000 a year to local charities” communicate the same thing, but one paints a much clearer picture.

• It is set by the leader. Rather than being set by committee, a good vision is set by the business owner and leader in chief.

• It must be aspirational. Your vision should describe a future context. It should give the employees working with you something to work towards.

In order to drive growth your vision statement must play a central role in all of your communication. If it just sits on a shelf it will not do anything. If you use it to set goals, to evaluate performance, to judge the fitness of new hires, to decide which partnerships to pursue and which customers to leave… if you actually use it every day it will make a big difference. When vision is recited by leaders in an organization it can unite your people by giving them a purpose to engage with, together.

VALUE(S)

Enduring and unchanging descriptors of a company’s culture.

With togetherness comes conflict and mess. Values are an important ingredient that direct how your people are to act in pursuit of the vision. Generally, values are unique to each organization and are also set by the leader. If Vision describes where you want the company to go, Values describe the company you are committed to being along the way.

There’s no formula for determining what your values are, but there are a few things to be mindful of when setting values.

• Values dictate your culture. Without values, a culture will still exist...it just may not be a culture you want.

• Values should be easy to remember. Choose a word, then briefly describe what it means. For example, one of Axiom’s values is truth, which means we speak the truth even when it’s difficult (to say, and hear).

• Values should be pre-eminent, not pretentious. It’s what we do that matters. This means two things: 1) Values should be public, so we can be held accountable when we fail. 2) Values should influence every company activity.

APPLICATION

Taking from the last bullet point, it’s what we do that matters; the information in this blog is only going to be helpful insofar as you apply it.

In the past, we’ve written largely to an audience of business owners and given practical advice to match. However, we’ve realized there are two groups that have a vested interest here: employees and employers.

To the Employee. The most practical way you can use this information is by “leading up the chain of command.” The phrase comes from authors Leif Babin and Jocko Willink in their book Extreme Ownership. Stated simply, leading up the chain of command means providing your leaders with valuable information they would otherwise not know so that they can support you with the proper tools and resources. In this case, leading up the chain of command means that if your boss hasn’t talked with you about vision or values that’s as much your fault as anyone’s.

Consider asking your boss questions like:

• How do you see our values influencing daily operating activities?

• What do you hope to accomplish with the company? Where are we going?

• What are the words you want vendors and customers to use when they describe their experience with us?

In every instance, these conversations benefit the organization. If your boss cannot articulate vision or values, you have the ability to stress how invaluable they are. If they have vision and values, and but few people know them, you have the ability to help them hone the message and  then rebroadcast it to the entire team.

To the Employer. Vision and values are foundational ingredients for your success. Without them, you handicap your company’s growth potential. Do you have a vision? Do you have clearly stated and defined values? If not, your homework is straightforward. Step one is to draft a vision statement and a short list of values.

If you have vision and values, step two is to ensure that your entire organization is acutely aware of them, even to the point of annoyance. There are many ways to do this.

• Make them public and visible. Put them on the walls and in the public spaces of your office.

• Make performance reviews an evaluation of both technical skills and adherence to values.

• Adjust operating activities to be reflective of your values.

• Build and execute strategic plans to accomplish your vision. It won’t happen on its own.

It takes a great deal of reflection and intention to define and set vision and values. It doesn’t get any easier when having to do this amidst the day to day hustle. Yet the right ingredients for growing your business are within your control. Focus and align your organization around a shared vision and values, then set your sites on growth.

Complacency Is a Company Killer

Co-authored by Devin Dash and Joey Brannon

Complacency is a company killer. It’s exactly what led Kodak to bankruptcy in 2012. What role did complacency play? Well, many years before its ruin Kodak snubbed the invention of their own engineer, Steven Sasson. He invented the digital camera technology in 1975, and rather than embracing the novelty, Kodak dismissed it. Who knows what led to Kodak’s complacency? The fact is, it crept into Kodak’s executive arm with disastrous effect.

Yet, despite this story and others like it, complacency still lingers unchecked in many organizations. I’ve heard words that make my ears burn: “I’m comfortable” and “it [the business] supports my lifestyle.” We’ve got to readjust our thinking. In this post, I define complacency, I share how to fight it, and I recommend a tool we use to guard against it?

Diagnosing complacency can be difficult. This is due to the fact that the feeling of complacency is private. Unlike a mechanical failure, a defiant employee, or product flop, complacency isn’t something we easily see. Its root is in the hearts of individuals and their motivation. Unless we are really introspective, we may not even notice it in ourselves. Additionally, we may mistake complacency for contentment. So, what is complacency?

COMPLACENCY DEFINED

By definition, complacency is a feeling of smug or uncritical approval of oneself or one’s own achievement. Complacency described simply is unhealthy satisfaction; it has two distinct characteristics.

Smugness: An owner wrestling with complacency is self-focused. Their desires, their comfort, awards, income, and other accolades make up their vision. It goes without saying this is dangerous. Purpose, in a company under complacent leadership, is individualistic, and short term.

Uncritical: Complacency is also uncritical. Another way of describing this would be self-affirming. This means someone who is complacent may not reflect on what brought them success. It’s linked with pride because it is a lack of personal criticism. A complacent person may still be critical of others.

Continuing with Kodak as our example, we see the presence of these two characteristics. The execs were riding a market share close to 80% in the U.S. and 50% globally. Surely this affirmed their status as accomplished executives and afforded them financial comfort. They failed to consider where innovation had brought them and were also critical of others, e.g. Sasson and his invention.

COMPLACENCY’S KRYPTONITE

To avoid Kodak’s mistakes, it’s important to combat complacency. The best method against it is healthy dissatisfaction. Healthy dissatisfaction rival’s complacency because it’s the exact opposite. The key to embracing healthy dissatisfaction is living out two qualities: humility and discernment.

Humility: As one pursues healthy dissatisfaction, humility must be practiced. Humility means one simply considers themselves less. Humility guards us against satisfaction and dissatisfaction that is focused on self. This also shifts our focus to the business and enables us to more accurately and objectively gauge performance. Humility also encourages the pursuit of goals and achievements that are divorced from self interest.

Discernment: A healthy dissatisfaction requires discernment. This means we don’t live with our head in the clouds or buried in the sand. Rather, we seek to understand all the factors that lead to an outcome. One practical application of discernment is to examine and question the excellence, or shortfalls, of decisions. Without discernment, one risks being dissatisfied without knowing what to change, or satisfied without understanding what brought about success. Discernment enables growth by encouraging critical evaluation of options and opportunities rather than reliance on the status quo.

TOOL AGAINST COMPLACENCY

The best way to guard against complacency is to develop and execute a strategic plan. At Axiom, we help clients build one-page plans that foster both healthy satisfaction and healthy dissatisfaction. Plans are so effective because they:

• Provide consistent direction

• Define winning, and

• Establish standards for accountability

• Are made public and acted upon

The best plans demonstrate humility and discernment in each of these areas.

Consistent Direction: Every individual in a company should be able to say where the organization is going. Your vision is the answer.  A vision answers the question, “what is the projected future of the organization and its place in the world?” Answering this question will guard against complacency because it declares a purpose that is beyond serving any one individual and it does so in an innovative and intelligent way (i.e. it demonstrates both humility and discernment).

Winning: Just as every individual should be able to say where the organization is trying to go, every individual should know whether any progress is being made in that direction. A good plan will define what winning and losing look like. The best plans will do this with humility by defining a win as something other than a zero sum game (i.e. one person’s loss is another person’s gain). Those same plans will embody discernment by setting goals that, if accomplished, will lead to the attainment of the long term vision of the company.

Standards & Accountability: Things happen because individuals act. A plan helps communicate which individuals are responsible for which outcomes, and provides a basis for holding people accountable for their performance. The best plans apply to everyone, from the most junior employee to the most senior executive. In other words, everyone submits to the plan and demonstrates a measure of humility in doing so. The best plans require great discernment to engage every member of the organization and provide a basis for evaluating every individual’s performance.

Public Action: Plans are pointless without action. And action often has consequences that are hard to predict. This can be hard for teams. There is no guarantee of success. There will almost certainly be failure on some level. Ignorance will be revealed. Dirty laundry will be aired. Individual and group performance won’t always measure up. Such is the fate of teams that roll out plans and begin to act. The alternative, which happens quite often, is that individuals build their own plans with varying degrees of ambition or optimism and then either fail to act or do so privately outside the discerning eye of other team members.

It takes a great deal of humility to perform on the public stage where others can critique and pass judgment. In his speech before the Sorbonne in 1910 Roosevelt said it best, “There is no effort without error and shortcoming” [1]. Action requires the humility to fail publicly and the discernment to critique performance without succumbing to judgmentalism.

If you feel yourself sliding toward complacency cultivate a healthy dissatisfaction by thinking hard about what your company’s future should look like. What do you aspire to? That vision is the start of a great plan that if built and executed with great humility and discernment will reignite a passion for your work. And passion is anything but complacent.

[1] http://www.theodore-roosevelt.com/images/research/speeches/maninthearena.pdf

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