Has your business stalled out on the path toward your vision? What have you failed to consider? What questions do you need to answer?
If you’re a business leader, you’re concerned about your company’s growth—regardless of the phase of growth it’s in. We’ve put together 13 exercises containing a total of 44 questions to ask about company growth that are based on concepts in Built to Last, The E-Myth Revisited, Traction, and Zero to One.
Read on for these practical exercises you can do on your own or with your managers.
Exercise 1: Assess Your Business
In The E-Myth Revisited, Michael E. Gerber writes that typical small businesses go through three phases: infancy, adolescence, and maturity. In infancy, the owner does all the technical work. Many fail at this point due to overwork. Those that survive may hire help in adolescence, but problems arise as the owner struggles to manage. At the adolescence crisis point, owners must develop business knowledge and leadership skills or shrink, crash, or barely survive. The most successful companies have business knowledge and an entrepreneurial mindset from the start. Owners must move beyond a technician role and learn new skills or their business will likely fail before reaching maturity.
Here are a few questions to ask about company growth with these three phases in mind:
- Which phase describes your business right now?
- What do you see as the next step in its evolution?
- Is your business on a path to maturity (success)? Why or why not?
Exercise 2: Your Business Objective
Gerber explains that your business objective is a clear statement of what you want your business to look like when it has fully evolved and what you want it to accomplish.
- Do you have a written business objective? If so, what is it? How could it be improved? If not, write a potential strategy statement.
- When your business has fully evolved, how big it will be in terms of gross revenue? What are your estimated pre- and after-tax profits?
- How does your business’s strategic objective dovetail with your life goals?
Exercise 3: What’s Your Vision?
Traction offers a helping hand for beginning entrepreneurs and others whose businesses are stuck at a point where hard work and determination are no longer enough for them to survive and grow. Business owner and consultant Gino Wickman explains how to structure your business using his Entrepreneurial Operating System to remove typical frustrations so it regains momentum, it runs seamlessly, and you don’t get mired in details. The system is based on practical experience, not theory. Numerous tools and templates lead business owners step by step through processes to create a structure and core focus that strengthen and reenergize their organizations.
Wickman contends that your business should be guided by a vision, which is based on your core values; a core focus or purpose; a marketing plan; 10-year, three-year, and one-year goals; and 90-day priorities.
- What are your three core values (think of the values demonstrated by your top three performers—some of those are likely your core values)?
- What’s your company’s core focus—what does it do better than anyone else? What functions are you performing that you should consider getting rid of because they distract from your core focus?
- What’s your long-term goal—what do you want your company to look like in 10 years (for instance, in terms of revenue, profit, and market share)?
- What’s your three-year goal—where should your company be in three years to be on track for your 10-year target?
- The key component of a successful marketing strategy (another part of your vision) is knowing your company’s differentiators (three strengths that set your company apart from competitors). What are your differentiators?
Exercise 4: Is Your Business Stuck?
Wickman writes that many businesses become stuck or fail because their owners can’t let go of control, build a trusted leadership team, delegate, and systematize their business.
- In your business, do you have a leadership team that you trust? What kinds of things do you delegate? How often do you check up on people?
- Do you spend more time working on your business (thinking and planning strategically) or working in your business? Why?
- Think of a recurring issue in your company. How do you and your people handle it—is there one way or does everyone do things their own way? How could you handle it more systematically?
Exercise 5: Document Your Processes
Your business has a few key processes that keep it functioning. Wickman asserts that identifying, documenting, and ensuring that everyone follows your key processes consistently makes your business more efficient and scalable. Here are a few questions to ask about company growth in relation to processes:
- Think of a process in your company or department that different people handle differently. What problems have resulted from the inconsistency?
- What’s a key business process that you’re involved with? Document it by listing the most important steps. Next, list the procedures for each step as bullet points.
- Streamline the process by removing any redundant or unnecessary steps. What steps could you take to share and ensure others follow the process?
Exercise 6: Startup Success
Zero to One is entrepreneur and venture capitalist Peter Thiel’s unconventional advice for technology startups. Thiel, co-founder of PayPal and the first outside investor in Facebook, argues that technology has stagnated. Most new companies improve incrementally on existing products, but Thiel argues that the most valuable and game-changing startups create something new. They move the world from zero to one. Creating new things is not only the best path to profits—it’s also the only path for human progress.
Thiel argues that, to succeed, a company must have solid answers to the following questions:
- Engineering: Is your technology a significant advance or only an incremental improvement?
- Timing: Is this the right time to sell this technology?
- Monopoly: Are you targeting a big share of a small market?
- People: Do you have the right people on your team?
- Distribution: Do you have a plan to market and sell your product?
- Durability: Will you dominate your market in the next 10 to 20 years?
- Secret: Have you identified a unique opportunity overlooked by everyone else?
- Answer the above questions for your company or a potential future business.
- Which of your answers are the strongest? Which are the weakest?
- How can you improve your weakest points?
Exercise 7: Monopoly Profits
Thiel asserts that how your company chooses and expands its markets is critical to its success. You should target a small niche that you can dominate and then slowly expand to related markets and eventually larger markets while maintaining monopoly control.
Here are some questions to ask about company growth in relation to the market:
- Think about your business or a potential future business. How would you define the market (target customer and size, other potential players)? How could you check to make sure that your intended market actually exists?
- Does/Will your company dominate your defined market? How do you measure market dominance?
- What’s your next logical step for expanding your market from a small niche to something related?
- What would it take for your company to be the last mover (to make the last spectacular improvement that ensures years of monopoly profits) in your ultimate market?
- Thiel argues that a 10x better product is necessary to building a monopoly. Is your product 10x better? If not, what could possibly make it 10x better?
Exercise 8: Shift From Time Telling to Clock Building
Many enterprises come and go, but visionary companies endure for generations. These companies are the gold standard in their respective industries, remaining prosperous throughout many decades and at the hands of many different leaders. Beyond attaining financial success, they’ve also become household names, ingraining themselves into our collective psyche—it’s hard to imagine a world without them or their products, from Band-Aids to Post-it Notes to Mickey Mouse.
But, what’s the key to these companies’ longevity and tremendous success? Bestselling author Jim Collins and Stanford professor Jerry I. Porras embarked on a six-year research project to answer this question. In Built to Last, they share the fruits of their research, laying out the important concepts behind enduring success and providing practical advice for building a company that lasts.
The fact that visionary companies don’t rely on one great idea or one superstar CEO represents one of their distinguishing characteristics. Rather than focusing on “time telling,” they focus on “clock building.”
- Time telling: You rely on one person’s unique ability to tell the exact time by looking at the sky. Once that person is gone, everyone else will be lost. Letting one great idea or leader carry a whole company is time telling.
- Clock building: You make a “clock,” or system, that can tell everyone the time, even after you’re gone. Creating an innovative company and strengthening your leadership culture so that the company will continue to thrive is clock building.
Clock building seems like a daunting task, so start small by determining how processes you’re already involved in can continue to work without you. Here are a few questions to ask about company growth in relation to your role:
- List all of your responsibilities in your organization. Of these responsibilities, which ones would create a bottleneck in your organization’s workflow if you were to get promoted or go on leave?
- Choose one of these responsibilities. Describe how being absent or otherwise unable to fulfill this responsibility can affect the overall organizational workflow.
- What are two or three steps you can take today to ensure that your absence won’t cause a disruption in your organization?
Exercise 9: Define Your BHAG
The Built to Last research revealed that, far from being overly cautious, visionary companies in fact set risky, progress-stimulating goals—what Collins and Porras have coined Big Hairy Audacious Goals (or BHAGs, pronounced bee-hags). BHAGs are goals that take you out of your comfort zone and require a strong commitment to see them through. They typically take 10 to 30 years to achieve and only have a 50- to 70-percent probability of success, but you should be able to look at them and believe that you can achieve them.
A BHAG inspires people, creates momentum, and stimulates progress. If you don’t have a BHAG, now is the time to set one. Here’s how:
- Think back to the exercise on vision. Where do you want your business to be 10 years from now? Think in terms of operations (number of stores, revenues, etc.), products or services, and even awards you want to win.
- How can you condense these aspirations into a clear, concise goal? (For example, “Make a sale every two minutes.”)
- What do you want this goal to motivate people to do? How do you think your goal statement is exciting enough to accomplish this?
- How does your BHAG align with your core philosophy?
Exercise 10: Create an Environment for Progress
Collins and Porras explain that, rather than turning employees into unthinking robots, visionary companies empower them to think for themselves, innovate, and make bold moves—all while strongly adhering to the core philosophy. When they see that employees embody what the company is all about, visionary companies give them the wings to fly.
Visionary companies have systems and methods to stimulate evolutionary progress. Here are several questions to ask about company growth in relation to innovation and experimentation:
- Visionary companies took incremental steps to pivot their business, sometimes starting with little experiments. What’s a project that your management seems to be wary of? (For example, the management of a chain of coffee stands might be hesitant to introduce snacks as part of their product line.)
- What small experiments can you do to prove its feasibility? (For example, you can convince them to sell snacks at just one coffee stand for a month.)
- What are two or three reasons that employees within your company might be hesitant to innovate or share new ideas?
- What practices or policies can you put in place to encourage employees to experiment and explore new ideas?
Exercise 11: Create a Leadership Continuity Loop
Collins and Porras write that, to ensure continuity, visionary companies have a leadership loop, which has three essential elements: They develop leaders and come up with a succession plan, they have a list of strong internal candidates, and they ensure continuous excellent leadership from within.
These questions to ask about company growth will help you make sure your company (or department) has capable people ready to take your place and maintain the business’s momentum:
- Imagine that you and your next-rank member of management suddenly left the company. Whom would you trust to take your place? List two or three candidates and why you think they’d be a good choice.
- Evaluate each candidate on your list. What kind of skills do they need to develop in order to be ready for the role?
- What kind of training exercises can you set for your candidates to hone the skills necessary for the position?
Exercise 12: Seek Alignment
Collins and Porras say that your vision is a combination of a strong core philosophy and the type of progress you want for your company. So, having a clear vision can be useful. But, it’s only the first step. The real work is in bringing the vision to life. Visionary companies try to bring their vision to life by incorporating their core philosophy into everything they do, from setting audacious goals to building an elite corporate culture, to evolving continuously and developing generations of leaders. Most importantly, visionary companies make sure their methods of maintaining the core and stimulating progress are aligned with each other.
Visionary companies don’t come up with random ways to preserve their core and stimulate progress. They make sure every element they introduce is aligned.
- Think about your organization’s incentive systems. Do they reward behaviors that reinforce the company’s core values? If not, what kind of incentive system would reinforce the core values?
- Review your company or team policies in a specific area (for example, mandatory training exercises). How do they encourage progress? How do they get in the way of progress?
- What changes can you make to progress-blocking policies so that they better stimulate change and improvement?
Exercise 13: Keep Improving
According to Collins and Porras, visionary companies recognize that simply aiming to beat their competitors puts a cap on their goals; once they beat the competition, they can drift into contentment. But, visionary companies know that contentment is one step away from complacency, which could then lead to decline. So, visionary companies are always on a quest for continuous improvement.
Visionary companies recognize that success is never final and are thus driven to keep improving, even though they’re at the top of their game. Make sure you have mechanisms in place to prevent complacency. With this in mind, here are two final questions to ask about company growth:
- What mechanisms of discomfort can you implement to keep people from becoming complacent? (For example, you can make it a regular exercise to view the company through the lens of a competitor.)
- What actions have you taken recently that set you up for long-term success instead of short-term gains? (For example, you invested in the hire of a top-notch engineer rather than moving your company into a nicer office.)