To continue our Saturday night theme, using the book The Seven habits of highly effective people and how the ideas might be applied to the current situation, this week we are covering “Begin with the end in mind”.

That way of thinking might apply to four different timescales:

  • Your life as a whole. What would you like the person delivering the eulogy at your funeral to say?
  • Your vision for where you want to be in five years
  • Your goals for the next two years
  • A project you are starting

Whatever the timescale you are thinking of as “the end”, beginning with the end in mind has become infinitely harder than it ever was before when many of the certainties of life have been removed. We have no idea what the economy will look like in three months, so planning is much harder.

And it all depends on what your definition of “the end” is. 

Many of my clients are what I call “accidental millionaires”. By that I mean that I’m pretty certain they did not set out with a goal of huge financial success. 

Their mission was to do a good job, protect their reputation every day, treat customers and suppliers fairly and earn a living. By doing that day in day out, they seem to have magically ended up with a really successful business. That’s one way to do it.

The other way of achieving success is the “process driven outcome” approach. This is almost compulsory thinking almost young sports men and women. Once you know the code you hear it referred to in interviews all the time. 

This approach is to start by thinking about the outcome you want to achieve. To have the number one company in your field, to be famous, to make £1m profit per year. Then you think about the performance goals you need to hit to achieve that outcome. 

Finally, you identify the process goals. The things you need to do every day to hit those performance levels that will achieve your chosen outcome. 

And then you just do those things every day, measuring performance, assessing the results, tweaking the processes and letting the outcome take care of itself. It’s a technique that has fuelled a thousand winners medals.

But whilst this mindset can drive you through your teens and twenties, as you get older it becomes harder. If you don’t have an underlying belief that what you are doing is the right thing to do, then it is hard to keep going day after day with the same level of enthusiasm. 

With the advent of TV shows and competitions in about everything you can think of, TV has now started to make certain people famous who have spent their careers doing whatever it is they do, perfecting their skills. People who have risen to the top of their chosen professions in baking, sewing, building and even tattooing suddenly made famous. 

And it’s not a new phenomenon. Charles Darwin wrote “The origin of species” when he was 50, Henry Ford produced his first car at 45, Colonel Sanders opened his first franchise 62. But this success didn’t come out of thin air. They had been building their knowledge and skills for decades. 

The common quality amongst all of these people is that they did the right things day in day out and then the outcome took care of itself. 

Contrast that with the people we all who have all the ambition but are not prepared to do what needs to be done day in day out. I have heard those people described as dreamers. We have had many of those over the years as clients but their businesses rarely last. 

Being good isn’t enough, you still need to make money

But whilst being good at what you do and perfecting your skills and processes is critical you also have to make some money!

We have all heard the story about how Pablo Picasso acquiesced to a request to do a drawing on a napkin and then asked for $10,000. “But it’s only taken you 30 seconds” exclaimed his fan. “No, it’s taken me 40 years” was his reply. 

But for every Picasso there is also a Van Gogh who died penniless having never sold any of his paintings for significant sums. 

Ultimately even if you don’t aspire to be a Picasso, you definitely don’t want to be a Van Gogh. That will probably require you to step outside your usual comfort zone and learn skills that you are not naturally good at. Training session on how to understand your management accounts anyone?

But so much for doing the right things day in day out in order to achieve our chosen end. How can we do this when there are all these uncertainties?

Well you might need to begin with the ends in mind.

There are many scenarios for how this will all roll out economically, but I don’t think any of them include a return to the stone age. Some sort of normal business will be resumed at some point. 

If you have a range of different economic scenarios to focus on, what would your end goal be in each of those scenarios? And what things could you be doing now which would be of benefit whatever the scenario is? Savaging relationships with some of your key suppliers and staff for a short-term cash flow advantage is unlikely to be in that list. 

And just because developing a strategy is harder that doesn’t mean that you shouldn’t strategise. In fact, it’s probably more important than ever. 

The economy may emerge slowly from lockdown or it could emerge quickly. There will be opportunities. Will you be ready? 

Of course, your ability to think long-term may be dependent on your current circumstances. If you have no income and are one of the many of owners of small limited companies who have virtually no help from the government, then every penny counts at the moment. But you can still get yourself physically fitter and you can still read. Lockdown brings all sorts of opportunities. 

If you’re lucky enough to have money in the bank and your burn rate is six months or more, then panicking is not the right strategy. You have a wider range of options. Just because the job retention scheme has been extended to the end of July, that doesn’t mean you have to furlough all your staff until then. Remember, as long as they have been furloughed for at least three weeks, you could bring some back even if just for a week to work on a project. 

If your project was working on something that qualified for a Research and Development tax credit, you will save 43.7% of the cost in tax relief. And it could be something that creates a completely new source of revenue for your company.  

Whatever your daily routine and plans for this week are, make sure you start with the end in mind.

Read our next article in our the Seven habits of highly effective people series: Putting things first. 

Contact me today!

Malcolm Palmer

FCA

Managing Partner

01474 853856

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