Blow with the wind

September 19, 2018

I grew up in the family business. I say ‘grew up in’ literally. My parents worked seven days a week, so my standard location before I could walk was underneath the till. Then when I could walk I was pricing goods and cleaning stuff. Things were far more straightforward when there was one other member of staff, than fifteen years later with over 20,000 items of stock and almost 100 people involved. I lived through every element of that scale, all the way through to my parents’ retirement when I pivoted the business into a different sector.

I can remember the days when stock control was manual. Paper and pen. I can remember when my dad and I booted up the first computer system, long before the World Wide Web, and we gazed in wonder at the black screen with green text saying Xenix. It was an extremely popular version of Unix in the ‘70s and ‘80s and it revolutionized our little company. We were able to link the tills to the ordering system, and then via a phone line we could actually communicate with suppliers. This was space-aged stuff at the time, I can assure you.

Every memory I have involves a change. A movement from one state to another. I remember that we did not really know what was coming around the corner—we just had a very clear objective in mind and the new tech available, or the changing customer expectations, were just part and parcel of running a business. We never considered that change would stop or that change was a bad thing, we just got on with it. Every day and every night.

It is what small businesses can do that large ones cannot so easily. When we are small we can flex more with the flow. I love that. I love being able to do a u-turn strategically, without having to explain it to Wall Street analysts. In Clayton M Christensen’s book The Innovator’s Dilemma, he says outstanding companies can do everything right and still lose their market leadership—or worse, disappear altogether. What he cites as the reason is that while you get bigger as a company, your ability to continually innovate slows or stops. I have seen this to be true.

In my book, Powered By Change, I go a level deeper and look at the DNA structure of change and how we can use it as a supercharging fuel. This is because I think there is a bigger dilemma than being unable to innovate even if you want and need to…and it is that:

  • we are no longer in the world of one-off change management, we are in the world of managing perpetual change.
  • how we respond to that determines our destiny, regardless of size.

In any of the startups I have had, following my parents’ one, I have tried (with varying degrees of success) to emulate the agility my parents had. I have asked them how they managed things and they simply stated that the only thing they knew for sure was that change happened. They did not have any other assurances. Suppliers went bust, customers changed habits, staff went rogue—all manner of stuff hit the fan—but with a clear objective in mind, they were able to ride all the waves together.

There is a key here. A clear objective. A focus point that is crystal clear to every single person involved in the organization. An anchor that, despite being moveable, is not vague or partial. In my book, I have an entire section dedicated to this, called ‘purpose’. I have liberally used some excerpts here to illustrate my point—primarily because once you have purpose, handling the guaranteed change is far easier.

Getting to grips with the purpose of a business is commonly understood to mean looking at ‘why’ it should exist, and then building engagement and loyalty on the back of that mission along with the values that underpin it. As Virgin Group founder Sir Richard Branson says: “If you are building a business without purpose, not only are you missing the point, but you are most likely missing out on the journey, the excitement and the profit too.”

Unilever’s Paul Polman, a flag-bearer of the purpose movement, puts it slightly differently but still sees purpose in business as being fundamentally about the ‘why’. “The best businesses understand their consumer intimately,” he says. “They are real people with complex lives and concerns. That’s why the market for responsible, purpose-driven brands is growing so rapidly. There’s a massive return for companies on these social investments. We need to step up and deliver . . . through genuinely purpose-driven brands that answer a real need.”

I have no argument with either of these views. There is some clear evidence that the 2008 financial crisis has left a residue of doubt about the rationale and functioning of the capitalist system, and a need for a stated purpose that entails more than simple profits and shareholder value. However, the requirement for this is not new. In ancient civilizations, such questions were asked too. Indeed, in ancient Greece, individuals’ tombstones recorded not the dates of the deceased’s birth and death but the thing that defined their ‘telos’, or the essential purpose of their very being. Teleology was a major subject, and in those days the searchers of reason were regarded as leaders and superheroes. So, we can see that the questioning of purpose goes back a very long way.

However, the approach to purpose that my parents took is linked more closely to the ‘what’ than to the ‘why’ of a business. Ethical approaches to businesses are commendable and worthy, and it is hard to argue with the conviction that those firms that do not operate in line with consumers’ moral compasses greatly diminish their chances of survival. However, being ethical or clear about your ‘why’ does not automatically guarantee continued success in a perpetually changing world.

When we look ahead to the changes that will transform the planet in the next 10 or 20 years, if we truly want to be able to adapt, then a company’s purpose needs to be framed around ‘what’ it is for as much as it does about ‘why’ it is doing it. One might think that some of the world’s biggest companies would know exactly what it is they do, if not precisely why they do it. Yet, a first glance at this can miss what is actually at the heart of a company’s reason for existence.

I implore you to dig deep into that answer. What it is you are actually in the business of doing, and why it matters? What would be the outcome if you stopped trading? Would anyone care? What would you launch if your existing products or services did not exist? What is the wider arc you are on?

In my parents’ case, they were on a mission to make homes more happy. This ranged from furnishings to toys, and paintings to crystals. Nothing was off the agenda—if there was a chance, a home would be happy, they would stock it. Why? Because home is a massively important construct of life, and happiness is too. This was why change was welcomed. The changes enabled my folks to create happier homes. And they did, in business and in life. I am extraordinarily proud of them for it.