Client Journey: Strategy Is about Saying No

Table of contents:

 What happens when you say yes to everything?

The natural tendency of small business owners is to say yes to everything: This reflects the fact that (a) there is often no one else to delegate work to, and (b) the owner/director seeks to retain control of their own business. 

This isn’t sustainable, however. Inevitably, saying yes to everything means:

• Potential burnout for business owners. As owners take on more work than they can handle, they are likely to get chronically exhausted which will compound any problems within the company and lead to a downward spiral. In a recent Gallup survey it was reported that about 20 percent of leaders, and 35 percent of people managers, report being “burned out very often or always”. It can be expected that this figure would be even higher among small business owners and directors. 
• HR failure. Being able to say no and instead delegating the task is a crucial element of leading staff and building their capabilities. In influential research by Chen et. al. in 2007 “A multilevel study of leadership, empowerment, and performance in teams”, it was shown that delegation (done well) results in enhanced employee job satisfaction, increased organizational commitment, more innovation and overall higher task performance. 
• The risk of business failure. Taking on everything means losing a strategic focus and not putting time into the things that really matter. ASIC statistics consistently show that poor strategic thinking plays a powerful role in business insolvency in Australia. 

Below we look at some of the benefits for business owners in being more strategic.

Benefit: The power of prioritisation

Every business, regardless of its size, has limited resources, be it time, money, or manpower. There is always a trade-off when directors focus on one thing — so  it is crucial to make sure that one thing counts.

Every business needs ‘rocks’ — the most important things that absolutely need to get done in a given quarter. Our experience with some of the struggling businesses we come across is that they can’t tell us what their rocks are.

Benefit: Better risk management

Every task that a business takes on brings risks: There is the risk of non-performance (or poor quality performance), compliance/legal risks and there is an inherent financial risk — carrying out a task means committing finite business resources to that task. Overcommitting and not doing what you say you will also bring a substantial reputational risk to your company. 

By focusing strategically on just a few things, business owners can better mitigate potential risks.

Benefit: Better financial and cash management

In order to remain solvent, all businesses need to ensure that they are spending money on the things that truly matter to the company. More strategic financial and cash management might include: 

• Cutting off unprofitable product or service lines as soon as possible, allowing those funds to be allocated more profitably. 
• Optimizing processes. For example, the company might find that it is waiting too long for its bills to be paid and changing billing processes to ensure that bills are paid more quickly. Or it may find that too much cash is tied up in inventory and decide to implement a ‘just in time’ approach. 
• Better budgeting/financial goal setting. By being strategic about spending at the start of the financial period, the company can more easily track when it is going outside its targets.

How to become more strategically focused?

So the benefits of being strategic and saying no for small businesses are clear, but in practical terms, how is this best implemented? We would suggest: 

• Have a strategic plan. Your priorities (rocks) need to be identified for each quarter across each domain of your business. This makes it easier to say no to the less important things. 
• Guardrails. Ensure you have the right checks and balances in place to ensure that you are staying on track. This might include using financial guardrails implemented through accounting software (e.g., accounts receivable aging reports). It might also include time tracking software to report back to you on a weekly basis as to how exactly you are spending your time. 
• Share your strategic focus across the company. Unless you work alone, it is crucial that everyone in the business is onboard with the company’s strategic goals so that they too can ‘say no’ to tasks which fell outside that remit. 
• Build a support network. This might be a peer group or a mentor — it is useful for many people to have supporters to help keep them accountable to their strategy. 
• Regular review. Business activities need to be constantly reviewed to ensure that the business stays on track with its strategic focus. 

Learning to say no 

Small business owners are bombarded with tasks. To maintain good mental and physical health, and to ensure the ongoing health of your business it is crucial that you learn to say no. This means setting up your business, in advance, so that you don’t get distracted by non-strategic activities.