Business Coaching Blog
Formulating your beliefs
Wednesday, July 14th, 2021
If asked what is critical to their business, most leaders and managers will include “employees” in their reply. They understand that business is about people. With the right people, a clear and worthwhile aim and good leadership you can achieve anything.
If business is about people, how can it be reduced to formulas? More to the point, why would you want to do such a thing?
Well of course business is measured using formulas; profit margin, growth, return on investment, customer retention and so on. Used with intelligence and insight as key performance indicators these measurements can drive action and improve life for business owners.
But that’s not the kind of formula I’m talking about. I’m thinking about meta-formulas, “belief formulas” that capture a belief about business.
A good example of this is the formula that links employee satisfaction to customer satisfaction to profitability explained by Heskett, Sasser and Schlesinger in “The Service Profit Chain”. There are data supporting this linkage but in essence it describes a way of managing a business based on beliefs about people.
The Scaleup Formula© captures another belief; that owner-managed businesses all reach some revenue ceiling when the owner cannot find the hours to spin any more plates and for a business to grow beyond this point it must fundamentally change, and so must the owner.
Scalable businesses consist of repeatable processes operated by autonomous employees, with some kind of feedback and improvement loop using reviews. The role of the business owner is to create and nurture this system, rather than being the person that makes all the decision and deals with all the problems.
The Scaleup Formula is:
Standardised processes * accountable employees * regular reviews = a scalable business
What are your belief formulas and how do they help you achieve your aims?