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D32 is a premium business growth network where business leaders and experts in Perth and across Australia form meaningful relationships so they can leverage the time, contacts and activities of a vast network. D32 supports the little guys (and gals) and the 7-8-figure businesses. We’re a community that has each others’ backs. This podcast is about all things business, entrepreneurship and connectiom.
D32_Part2_Paul Claessen
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[00:00:00] Welcome back to the District 32 podcast, and in the studio, or actually in Perth. I'm in the studio. Um, gotta love technology. We have Paul Clayson from the Paul Clayson Consulting, uh, in Perth. Paul, thanks for joining us again today. Thank you. Now we're in the, uh. Second stage, I'm sure there's a real word for it, but the second stage of a series of four, uh.
Of what you call a pathfinder and how to run basically any business. Last week we talked basically about people finding, managing and leading. Uh, if you haven't heard that, you need to go and hear that because that's gonna be one of the critical factors in any business if you want any foundation happening in your business at all.
Uh, this one's all about performance. Paul, I'm keen to hear about this, how this is one of my passions as well. Performance yourself, but also performance in your team. [00:01:00] Um, take it away. How do we do this? Sure. Well, the, the, the big. There, there's a horrible statistic. And if, if you, you just need to look up on the National Australia Bank or NAB website and have a look at the statistics about small businesses in Australia.
And I think I said last week, I've got a genuine passion for helping small business owners. They carry the burden of the economy. They employ more people than anybody else. And I do really think any help that small business owners can get it, it, it's a great thing because it's a great thing for our society generally.
Um. And, you know, you started a business, you, you do it for reward. A lot of, a lot of small business owners, as I mentioned last week, are brilliant at the middle. The, the bit, you know, what it is that they do, they're technically excellent. They don't tend to think about the business bits around it. So how does that relate to Pathfinder?
Pathfinder being four core pillars of business success. One is a team of superstars. Two is how do you get your business to perform both financially and operationally? And the way I [00:02:00] break that down. Performance in a business is three elements. Element one is financial performance. You need to know you, you don't need to see that your business can produce, you know, like apple sized or Microsoft sized profits.
It's really important for you as a business owner to have predictable profits. And how do you predict your profits? I'll, I'll come back to that from that forecast model that you, you know, produced, which is a part of forecasting, it's very important. To then turn that into an operational plan. I don't know how many business owners I talked and they talk about their ops plans and I say, what are you planning to do?
And they give me a laundry list of items and it's like, yeah, but what does that achieve? And they kind of look at me quizzically. And it's like, how much money do you want to make this year? That is what an operational plan is designed to produce. It's a plan to produce the profit that you anticipate making.
And the last bit, it's all well and good to have a plan. You know, there's more, there's more [00:03:00] plans on the planet than people to execute them. You need to execute that plan. So for me, performance in a business is financial performance. How do you determine your financial performance? You build a financial for financial forecast modeling tool.
Second. Then turn that into an operational plan so that you can communicate that across the business and stop this idea of whiplash. That everyone's like, Ooh, what are they doing today? What are they doing today? And third is knuckle down and execute it. That's, that's a really good performing business. I love it.
I love it. It's very similar to a plan that I have for when I work with people in regards to performance, actually very, very similar. Hmm. And the big thing at the end obviously is the execution, making the whole thing happen. Um, so, okay, so there's two parts to that. So that's the financial side of things.
Three parts, parts, forecasting, ops, planning, execution. Okay. Awesome. Awesome. Now take us into the next one, the ops planning. [00:04:00] Well, let's just jump back to forecasting because it's a really difficult concept for people to grasp, and I'm gonna try and turn a difficult concept into a simple concept, and I might not succeed.
So I'm very happy for any of the listeners to reach out to me, and I've built some tools that can help build a financial forecast quickly. But in a nutshell, a financial forecast is finding that one, two, or three levers no more. In your business that if you pull on those levers, it will make the most difference.
Because you've got an infinite array of choices in your business, and you don't have the time to do anything about all of them. So you need to pick the three most important. And then once you've found those three most important levers in your business, it might be price, it might be more customers, it might be, um, you know, different services.
I, you know, I don't know, because every business is so, um, amazingly diverse. Then you've gotta find the one by doing a bunch of sort of scenario planning, which is the one or two that [00:05:00] makes the most difference. Now, that's really fundamental to operational planning because if they're the two things that make the most difference, build a plan to do those two things.
Yeah, don't go, don't go mucking around. Building a plan to, you know, lift customer satisfaction if customer satisfaction won't make a difference. Now, I'm not suggesting to be abundantly clear that you go out and upset your customers. I'm saying it's not the thing that putting effort into will make that much of a difference.
Yes. So build a plan, put milestones in those plans. Typically, a plan is a year, and then you break that down to a 90 day execution cycle. Now once you've got a 90 day execution cycle, then you just, you, you literally execute that. So how do you execute that? You gotta make sure what's most important. You have to focus on lead indicators, not lag indicators, because effort.
Is what drives results, not results don't drive effort. You need to build a compelling scorecard and you need to maintain a cadence of accountability. [00:06:00] If you say to everybody in the next 90 days, I'm hoping to get this done and then never mentioned again. There's four fifths of five, eight of zero chance of that ever happening.
Yeah. Now I'm not, I'm no mathematician, but that always comes to zero. Um, so it's about finding those important numbers. It's about focusing on the lead indicators. What are the things that drive those results? Build a compelling scorecard so everybody can look at it. There's no competitive sport on the planet that doesn't have a scorecard.
And then finally, a cadence of accountability, which is you as a team look at it. What's going, what's going right? What's going wrong? What can we fix that that is performance in a business? That's awesome. I love it and I, I love how you just break everything down so simply just to be able to follow it through, obviously putting those plans in place are gonna take work and, and effort and thought and all that sort of thing, but you give the [00:07:00] exact framework of how to hang everything, which is fantastic.
I, I'll go back to my, um, hypothesis of life. It's hard to run a small business. Don't make it harder for people. I mean, there, there's plenty of people out there with books and you read these books and you, you scratch your head and you think, what can I do with this? Yeah. And more often than not, it's nothing.
I, I'd rather someone go, great, I can do that with this. Yeah, exactly. Exactly. So we're talking about performance, so you've got the first two and the third one. Well, that, no, that's, that's effectively the three. It did build the fi build, the financial forecast modeling tool. Sorry about the little thumb that keeps on coming off on the screen.
I can't turn that off. Two is from that forecast modeling tool. Work out the one or two most important things. So the second step of performance is build an operational plan, which is typically your 12 month plan. And then from that 12 month plan, build that into a 90 day execution sprint, which [00:08:00] is wildly important numbers.
Find out the lead indicators of those numbers. Send that into a scorecard. And have a very frequent cadence of accountability around those numbers. Simple, simple, simple. And as you point out, very, very hard. Yeah, yeah. Simple is more often than not hard. Complex is easy, but complex doesn't result. Whereas simple results, you just need to, you need to put your shoulders to the stone and work at it.
Absolutely. Absolutely. Now, Paul, while we do have you, if people want to find out more about this or get in touch with you, what's the best way to do that? Uh, probably my email address, which is, uh, Paul at Paul Klassen, which is P-A-U-L-C-L-A-E-S-S-E n.com. Do au. Shoot me an email. I'm more than happy to jump on a call for 10 minutes.
I'm more than happy to just quickly answer. I'm happy to send my Pathfinder model to people. Um, you know, like [00:09:00] there, there's, there's lots of things. There's lots of ways of getting information and I'm happy to help people. No, I love that. Paul, thank you so much and thanks for joining us on the District 32 podcast.
Uh, this is step two in a series of four. Next week we're gonna be talking strategy. Paul's gonna break down how to do strategy in your business. No doubt it'll be simple steps. It may not be easy to implement and put in place, but they'll be simple to follow that anyone who's serious will be able to actually do it.
Look forward to catching you next week on the District 32 podcast. Thanks, Kingsley.