Successful Business Owners Are Made, NOT Born

Successful business owners aren’t different to anyone else, and there’s no reason you can’t replicate their success.

Take five minutes, then decide

Reading this article could be highly relevant and meaningful to you, both personally and professionally. It could also be a waste of your time. Take 5 minutes to decide. If it sounds familiar and deals with issues you face in your business, find out more. If not, you won’t have invested much time and you can put it aside.

Addressing the growth gap

50% of new small businesses failed within 5 years.
UK government statistics (from the 2012 Business and Innovation and Skills survey) revealed that 50% of new small businesses failed within 5 years.

Looking specifically at Small and Medium Enterprises (SMEs) there are some worrying facts:
  • Only 72% made a profit
  • Only 29% grew their turnover year-on-year
  • 9% expected their business to close within 5 years
There are similar statistics in most major countries.

This is because the majority of small business owners are experts at the skills required for their trade or profession but have had no formal business development training.

For most small business owners, the need to increase profits never stops. Unfortunately, the personal growth of people in the business is not a priority.

In his book Talent is Overrated, Geoff Colvin explains:

“Extensive research in a wide range of fields shows that many people not only fail to become outstandingly good at what they do, no matter how many years they spend doing it, they frequently don’t even get any better than they were when they started.”

We can increase the skills of business owners.
That creates a growth gap. Just hiring new people can be costly, inefficient, and doesn’t always fix the underlying problems. Filling the gap with quality, by improving your own knowledge and skills and that of the people you have in your business is a challenge. Whilst it is a challenge, there’s an obvious pay-off if we can increase the skills and abilities of business owners and their existing teams.

The key questions are:
  1. Can we teach the 28% of business owners that are running unprofitable businesses to be successful business owners?
  2. Can we teach the 72% of business owners that are turning a profit to make MORE profit?
  3. The answer is yes. Yes, if they are willing to commit to and execute four key steps. I am going to explain those four steps in full below. I’ll answer the question, “What’s different this time? Why can business owners grow now, if they haven’t been able to do it before?”

    By the end of this document, I expect that you will have enough information to choose one of the following responses:

    A. This makes sense. I’d like to find out how it might apply to my business situation.

    B. Interesting, but not enough for me to take action now. Keep me on your mailing list.

    C. Are you mad, Les?

    Four steps used by all successful business owners

    1. Commit to a business growth system (mindsets, skillsets, toolsets).
    2. Use learning as part of a growth process and not a series of standalone events.
    3. Engage in an ongoing process of deliberate learning and practice designed by experts.
    4. Measure and monitor to ensure success.
    Step 1 is not a revolutionary insight; it’s a necessary approach, a point from which to start.

    Step 2 starts identifying and closing the gap between what business owners do and what they need to do.

    Step 3 is the critical success factor of continually improving performance and not a well-known (or well-executed) secret.

    Step 4 is what is necessary for business owners to stay engaged, motivated and discover what activities contribute most to their business growth – so that they can be repeated over and over again.

    To obtain the desired results, apply all four steps together.

    As you read through the four steps, I would like you to mentally test the following hypothesis:

    Any business owner of reasonable intelligence can have a great business if they are willing to learn and deliberately practice.

    Step 1: Commit to a business growth system

    I use the phrase “business growth system.” I could just as well say, business framework or business model. In your mind, you can do a mental ‘search & replace’ if one of those terms works better for you. I am happy either way.

    A business growth system helps you organise and understand your knowledge and experience. It clearly spells out what you believe works and doesn’t work in creating business today in a way that will create even more business the future.

    Reinforce and repeat what works.
    Being explicit about these beliefs allows you to test them against your own particular marketplace. When you get the results you want, you can reinforce and repeat what works. When you do not get the results you want, you can find out why.

    There are several business development programmes on the market with good track record and passionate advocates. And yet, not all would appeal to you equally.

    Here are some considerations for selecting one that is a good fit for you personally and as a cornerstone of how you want to grow your own business or professional practice. I use the word “should” below, knowing full well that I am expressing my own strongly held and substantiated opinions and beliefs.

    The business growth system should have a good balance of what to do and how to do it.

    Some systems are very process (what to do) oriented. They do a great job of spelling out the steps in a particular process and describing what you need to do at each step. Often they are far less rich in developing the specific skills, behaviors and mental attitudes that make you better at what you need to do to grow your business.

    They are more what to do and less how to do it. It doesn’t take too long before you know what to do and the real differentiators, those that create the results you desire, become more about how to.

    At the other end of the spectrum are system providers of skill sets that are powerful, but not incorporated into any repeatable or measurable methodology. No matter how important and impactful a particular ability, it is still just one among many critical and interdependent pieces of a bigger puzzle.

    A good business success system integrates solid what to do with expert how to do it.

    The business growth system should balance both simplicity and sophistication.

    When smart, experienced people build systems and programmes, they sometimes tend to make them thorough, complex, and capable of addressing a wide range of possible situations.

    Unfortunately, what I have seen on many occasions is that the more complex the system, the less it gets used. I see it all the time; people get overwhelmed and often burdened by the amount of detail involved; they can come to resist it, rather than actually be enabled by it.

    If a system is not sophisticated, it won’t make a difference. If it is not easy to assimilate and apply, it won’t be used. A good system should consciously balance the two.

    Ideally, the business growth system should be inclusive rather than exclusive.

    Many business development systems or programmes remind me of schools of martial arts. Each thinks it is superior to its perceived rivals. Yet in mixed martial arts competitions, those with advanced skills in multiple disciplines tend to outperform those who are exceptionally skilled in just one.

    The skills that you already possess should be identified and harnessed – “if it isn’t broken, don’t fix it.”

    Build on what you have previously found valuable.
    A good system or programme will build on what you have previously found valuable, while explicitly integrating it into the new system. It will encourage a focus on what works with customers or clients rather than on the egos of system providers.

    The business growth system should resonate in your heart, your mind, and your gut.

    Heart: To be a more effective business owner you need advanced emotional intelligence (EQ). Your system should give you practical skills to convert your top-priority values into everyday actions. It should steadily increase your ability to interact successfully with a wide variety of people. It should make relationship building something you can do deliberately rather than experience it simply by happenstance. You and your team members should feel as good about the journey as you feel about the destination or target.

    Mind: To be a more effective business owner requires sound business intelligence (IQ). Your system or programme should display intellectual rigor, promote good critical thinking skills, and push you to develop your business acumen. It should help you identify and communicate how economic value is created in a process, market niche, industry, or economy. It should encourage you to articulate and test your key assumptions and beliefs; to document evidence and collect data to support actions; to identify and overcome ‘lazy’ thinking from you and from others in your team.

    Gut: To be a great business owner requires courage and discipline. You need to prioritize and execute the few “must dos” rather than stay busy with the many “could dos”; you need to take difficult action when there are many other things you’d rather do; you must practice and push ahead while others are content with the status quo; you also need to skillfully push back when things don’t make sense.

    The courage and discipline to focus, to execute, and to eliminate the unnecessary should be part and parcel of your system.

    To recap, commit to a business growth system that:
    • Resonates in your mind, your heart, and your gut
    • Balances “what to” and “how to”
    • Balances simplicity and sophistication
    • Is inclusive rather than exclusive
    However, even the best business growth system in the world won’t enable you to be a great business owner unless you also implement the next two steps.

    Step 2: Use learning as part of a growth process and not a series of standalone events

    By far the most common method of acquiring new skills or techniques is a training event that lasts somewhere between one to five days at a time. Yet I am not aware of a single instance where an expert in a field became a great performer as a direct result of a one, two, three, four, or even a five- day event, no matter how great it was. The same is true of buying and reading business books.

    Over 80% of what is learned at training events is lost within one month
    Assuming such training is well received, you see an immediate short-term improvement. Without continual practice, repetition, reinforcement, and reflection, there is an inevitable decline. In my long experience over 80% of what is learned at training events is lost within one month without a deliberate reinforcement approach.

    Here’s what happens with a training only approach:
    1. You only retain a portion of what you learned during training
    2. You only apply a portion of what you know
    3. The level of what is known and applied is only a FRACTION of the potential
    What we’re really after is a sustained increase in profitable growth. For this to happen the training or learning is only one part of an overall system. Hence the need to ensure active focus and execution on steps 3 and 4.

    Step 3: Engage in an ongoing process of deliberate learning and practice designed by experts.

    If you’ve committed to a business growth system that really appeals to you (Step 1), you have laid the groundwork for growth in your business or professional practice — though you haven’t necessarily separated yourself from your competition.

    In Step 3, you have a major opportunity to make steady advances that most of your competitors do not make, and of course to move substantially past what others (your competitors) achieve.

    There are no innate qualities that successful business owners have that others don’t.
    There is a field of study called the Science of Expertise and Expert Performance. It studies the deep-level mechanics of how people become really good at something. I recall reading a significant body of evidence about hiring sales people that showed some surprising findings:
    • There are no innate qualities that top performers have that others don’t. For example, nobody is born to be a clarinet virtuoso or a brain surgeon.
    • There is no direct link between intelligence and performance. Once you are above a certain intelligence threshold, being smarter is not what makes you better.
    • Top performers do not come from one personality type – the ‘gift of the gab’ is actually a sales myth.
    • What about experience? Won’t a salesperson with 10 years or more of experience be much more likely to rise to the top of the field? The answer depends on the nature of the experience — and unfortunately, for most the answer is no.
    In my experience, the exact same circumstances apply to small business owners. It is not the number of years people spend in a given field; it is the amount of improvement they achieve in each of those years that equates to top performance.

    So why do some people become successful business owners while most stay the same or get worse? If IQ, personality, and experience don’t drive improvement, what does? What do top performers do that most do not?

    Deliberate Practice: the secret sauce of enhanced business performance

    From all of the studies I have seen, the factor that explained the most (if not all) about top performance was the quality and quantity of practice. Because the nature of this practice was so substantially different than what most people considered practice, experts in the field of top performance gave it a name — deliberate practice.

    The concept and application of deliberate learning and practice is sometimes complex. At iThrive we have applied this science to business growth in The Six Steps to Mastery, captured in the acronym F.A.S.T.E.R.:

    Foundation: Start with a clear understanding of where your business is today. Set realistic goals and establish how success will be measured. Create an initial plan or sense of direction for your business and your team.

    Access: Provide access (for you and your teams) to the required learning materials to acquire new skills techniques relevant to the direction in which you are headed, and to challenge existing mindsets or paradigms. Access should be incremental in order to avoid ‘information overload’.

    Simplify: Remove complexity and ensure a good sequential approach. In the same way a master chess player would not practice an entire game, but focus on ‘plays’ for specific phases of the game. A good business growth system covers the whole game but in learnable, retainable ‘chunks’.

    Test: Practice and try new skills and techniques, one at a time, reflect and test which are most effective. No practice means no progress. People progress in direct proportion to the quality and quantity of their practice. If repetition is the fuel of enhanced performance, reflection is the equivalent of a turbo boost. Research has shown us that people who reflect on their practice performance (and actual performance) before, during, and after each activity do far better that people who practice or perform without specific reflection.

    Getting really good at something is both fun and rewarding. It can often prompt business owners to search out more depth of expertise or to share their expertise with others on their teams. People with acute self-observation before, during, and after; begin to make new distinctions about what works and what doesn’t.

    When they share their new observations with others, or take the time to articulate them well enough to teach others on their teams, both learner and teacher benefit.

    Execute: Relentlessly execute more of the things that are proven to be most effective for your business. The testing phase is critical to identify the activities with the greatest return on investment (or effort). Systematically reduce or remove relatively ineffective practices in your business. Great execution requires continued focus and a mindset of continuous improvement and measurement.

    Results: Any good system or programme is focused on results. There is an old adage that says “What gets measured, gets done”. From my personal experience with top leaders in global organisations, I strongly believe that a disciplined approach to measuring Key Performance Indicators (KPIs) is a driver of behavioural change as much as it is a way to record change.

    Part of the quality design of a successful programme is to stretch the learner, but not too far. If deliberate practice is too easy, no growth happens. If it is too difficult, you can become discouraged and give up.

    Well-designed practice is mentally demanding. It works the brain similar to how a bodybuilder strengthens a body muscle. So, part of the stretch is the willingness to engage in something that is not always fun, not always what you would want to be doing.

    The good news is that the benefit of those ‘stretches’ is cumulative. When a particular stretch shows an immediate benefit with clients or customers, it provides motivation to take the next stretch.

    Key to the ‘stretch but not too far’ approach is to understand that performance grows in predictable stages. As business owners, we move up our respective ‘ladder of expertise’ on a rung-by-rung basis.

    Typically stages of performance attainment are as follows:
    • Level 5: Master performers, the best in the world at what they do: top 1-5%
    • Level 4: Great performers, experts in their field: top 10%
    • Level 3: Top performers, proven professionals: top 20%
    • Level 2: OK performers, apprentices, and ‘journeymen’: top 50%
    • Level 1: Non-performers, underperformers, and beginners: bottom 50%
    Skipping stages is not an option, though we may move through them more quickly based on the quality and quantity of deliberate practice. If you want to improve, you need to practice. It’s that simple. The more you practice, the better you’ll become.

    If business owners aren’t testing new ideas and deliberately practicing, they are not improving.

    Step 4: Measure and monitor to ensure success

    When consulting with business owners, I often ask the following question:

    “What would you have to see, feel or hear to know that your business is growing… or not!”

    The key word is KNOW, and by knowing I mean that successful business owners have hard evidence. Mostly, they are not able to clearly articulate what success and growth will actually look like.

    It reminds me of a quote from Lewis Carroll (Alice in Wonderland).

    “If you don’t know where you are going, any route will get you there…”

    A good business growth system will provide the means to establish the baseline of the business (Foundation), the mindsets, skillset and toolsets to enable growth AND the means to measure success in a way that is most appropriate for the type of business and the sector in which it operates.

    Do you agree?

    Successful business owners are made, not born. And the process to make them is known, practical, and has huge rewards for all involved. All it takes is focus, discipline, and execution of these Four Steps:

    1. Commit to a business growth system (mindsets, skillsets, toolsets).
    2. Use learning as part of a process and not a series of standalone events.
    3. Engage in an ongoing process of deliberate learning and practice designed by experts.
    4. Measure and monitor to ensure success.
    If this resonates with you, you might be interested to know how others have become successful business owners by using the tools in my online training programme, The Small Business Multiplier.