Why nothing in your business ever quite sticks, and the rhythm that fixes it

Most owners can name every project they’ve started in the last two years.

The systems upgrade went in. The new product launched. The bottleneck hire is in post.

On paper, everything delivered.

But is the business meaningfully different than it was two years ago.

For may, in practice, the business looks much the same – similar performance, similar problems, similar Sunday-evening dread.

This episode names the structural pattern doing that to businesses, and the single design choice that turns activity into delivered change.

Research shows that businesses that make the change deliver nearly 20% annual profit versus 12.5% for those who don’t. On a £10m business that's £750,000 a year. Every year you don't fix this.

Transcript

SPEAKER_01 0:02

In nineteen forty-two, the US government awarded Hard Hughes a contract to build the largest flying boat ever conceived, a wooden transport plane big enough to carry seven hundred and fifty troops across the Atlantic, because U-boats were sinking conventional shipping faster than it could be replaced. Hughes was 36, at the peak of his powers, and arguably the most capable industrialist in America. The contract called for delivery by 1944. The plane, called the Spruce Goose, flew once in November 1947 for one mile at seventy feet above the water of Long Beach Harbour with Hughes himself at the controls. It then sat in the hangar for the rest of his life, maintained at his personal expense in flying condition for an Atlantic crossing nobody needed anymore. While it was supposedly being completed, Hughes was simultaneously running Hughes aircraft, expanding his airline TWA, designing and personally crash testing the XF-11 reconnaissance plane, fighting a Senate investigation into wartime profiteering and generating half a dozen other ventures that would similarly take ten years to deliver or never deliver at all. One thing is for sure Hughes was not a lazy man. He was working harder than almost anyone alive. He wasn't under resourced, he was one of the richest men in the world. He just kept generating projects faster than the people around him could finish. And there was nobody with the standing to make him stop and complete one before he started the next. What Hughes had brilliance, drive, more ideas than time, the means to act on any of them was not the problem. What Hughes couldn't do was reliably deliver those ideas into delivered outcomes. And it's a common business problem you can easily test for by asking a very simple question, and that question is: is the business meaningfully different from two years ago? Most owners can name the projects they've started in the last couple of years, the new product line, the investment in equipment, the hire that was meant to solve the bottleneck, the systems upgrade, the new CRM, the premises move. The more interesting question is whether the business is materially different as a result. Not whether the project's closed, because owners are usually generous with themselves on completion. You know, the systems upgrade went live, technically. On paper, the project's completed. In practice, two years on, the business looks much the same as it always did. Similar performance, similar problems, similar Sunday evening dread. That gap between the activity and the change is what I call perpetual reset. The cumulative shift in the underlying business is a fraction of what the effort and expenditure would have predicted and should have delivered.

SPEAKER_00 3:19

And it can feel like doing doughnuts in a car and going round in circles.

SPEAKER_01 3:24

You're spinning, you're working really hard, foot flat to the metal, but going nowhere. And and while it seems, you know, while it seldom feels like the business has gone backwards, you know, it often feels like it's running flat out yet getting nowhere. And when you're stuck in perpetual reset, it doesn't feel structural, it feels personal, it feels like a problem of bandwidth and energy. You know, if I could just get on top of these priorities, if I could just get a clear week to focus, if I could just stop being pulled into the day-to-day. The diagnosis the owner settles on is almost always about themselves and almost always about time and effort. You know, owners, when I start working with them, describe the frustration as constant. Not a phase, not a bad year, but a steady state. You know, they have a they have a picture of where they of where they believe the business should be, and they and they watch it not get there. And they know in their heart of hearts the business isn't reaching its full potential, and yet they can't seem to make anything stick. Whatever they try, it it never quite gets the traction they want. Everything that needs to change feels like it should be fixable by trying harder, working longer, focusing more. Nothing about the day-to-day experience suggests that the answer is to do less, more deliberately, with a structure that forces things to finish before new things start. The strange thing about this is that owners who end up in perpetual reset are usually the ones with the most ideas, the ones who can see you know five things that need to happen at once, who can spot the opportunity in a new market segment while simultaneously diagnosing the production problem and sketching out the system's redesign that would fix half of it. They are, in my experience, they are brilliant at problem identification and solving. What most of them are not good at is delivering the finished solution. And how do I how do I know it? I I love finding problems, creating new ideas, and working out what's needed, the strategy, the long-term picture, the plan, the objectives, what the business has to look like in three, five, ten years' time, the most important fixes to make. My problem was once I'd worked out how to solve a problem, I wasn't very interested in doing the work to deliver the solution. And at Slide Rose, the business I was running at the time, I had a fabulous senior management team who made shit happen for me. Um, my non-executive directors, who I appointed precisely for this reason, my non-executive directors were very good at keeping me focused on what was most important and asking the boring repetitive questions. Most owners don't have that. Most owners of the entire idea generation function and the entire prioritization function rolled into one person with the team trying to follow them. A good friend and mentor described it as the magpie syndrome. Every shiny new thing pulls the attention sideways, and the team get operational whiplash, you know, trying to follow the owner's lead. Where are they going now? What are we doing? Where are they going? And they're trying to follow the lead and deliver what's asked of them because the owner is full of great ideas worth chasing. But it isn't a lack of good ideas that causes the problem. It is too many good ideas and no filter, no priority and no focus.

SPEAKER_00 6:59

And there's a price to pay for that. Firstly, there's the financial cost.

SPEAKER_01 7:07

A US firm called Stratford Analytics has analyzed thousands of completed business sales and looked at what differentiates the businesses that built professional management structures from those that didn't. And it's an average 20% profit margin for those with versus 12.5% for those without. Then there's the emotional and physical strain. The business isn't building the value you'd hope for. You're not getting the holiday you said you'd take this year, the gap between what you can see for the business and what's actually happening in it is widening rather than closing. And you go faster to fix it, trying out more new ideas, applying new fixes, hiring more consultants, and like that car earlier, doing donuts, your wheels spin, you generate smoke and noise, but you don't get anywhere.

SPEAKER_00 8:07

And then there's your team.

SPEAKER_01 8:10

Let's take an um fictional example. An operations lead is working on a project their MD has asked them to deliver. They're spending three days a week on it, they're about 60% through. They're really enjoying it. There's a there's a dopamine hit waiting on the other side when it lands. Then a new priority arrives. Uh, a customer issue a new opportunity, an idea you had on the way in. Sorry, an idea this mythical MD had on the way in. Me. The project gets paused, they get pulled onto the new thing. And a few months later they're in a meeting we're a one-to-one with the MD who has a flashback and asks, remember that project you were working on, is it done yet? And no, it hasn't been done. Because they were pulled off it for something else. From my sorry, from the MD seat, you know, for me at the time, the original distraction had receded. From theirs, they're now being held to account for not delivering something that I took them off. And that feels very, very unfair. In my case I was lucky because my ops lead, my ops director let me know and eventually I learned to change tack. However, having spoken to others who've been in the receiving end at other employers, they echo that feeling of unfairness and of being frustrated as feck the first time it happens. The second time it happened, they started asking themselves, What the hell am I doing here? Until eventually they were updating their CV. And what the hell am I doing here? Turns into feckless. I'll go and work somewhere else where I'm appreciated where I can actually feckin' deliver something. And they leave. And of course, the good ones leave first because they have the most options. And I think there's a horrible irony in losing your best people because you wouldn't let them complete projects and do their best work. What a waste for you and them. I suppose the big question is if owners can feel all of this, the team disengagement, the personal exhaustion, the gap between potential and reality, why don't more of them act on it? In in my experience, the the the biggest reason is that prioritization is unnatural to most owners.

SPEAKER_00 10:38

Everything is a priority because each idea individually is worth chasing. The real question isn't what should I focus on. The real question is what should I stop doing or not start doing.

SPEAKER_01 10:53

And that's a much tougher question because answering it means choosing what to give up. Without someone in the room whose job it is to kill the owner's good ideas so the team can focus on the great ones, that question rarely gets an answer. Sorry, rarely gets a real answer, a detailed specific answer. The second reason is that most owners have never seen the structures that make this work. They know they need to focus, but they don't know the rhythm and routines that actually convert focus into delivery. Sorry, that create focus and convert it into delivery. The system isn't visible to them as a system. It's other people's businesses that seem to make things happen for reasons they can't quite pin down. And then the third is that when they hear about the structures, a weekly focus workshop, a quarterly cadence, a defined cascade from vision to 90 days to weeks to days, they hear more meetings, another half, an hour and a half every week in the diary. Time taken away from running the business, and they're already exhausted. The last thing, the last thing they say is, I need another feckin' meeting like a hole in the head, Richard. Underneath those three reasons sits the same psychological pool. Owners focus on what they'd be losing rather than what they'd be gaining. And Daniel Kanerman, uh Kaneman and Tversky's, I think that's how you pronounce it, Taversky, their pr their prospect theory work named this decades ago. The emotional pain of a loss feels roughly twice as powerful as the joy of an equivalent gain. So losing a hundred quid hurts about twice as much as finding a hundred quid feels good. If we go back thousands of years, Confucius is supposed to have said that the man who catches two hairs catches neither. Most owners I work with know that intellectually. What they feel when asked to actually let one of those hairs go is the loss. Not the focus they gain, but the loss. Which I help owners implement and teach them, you know, for help for building valuable, transferable, and fun-to-run businesses. The flywheel itself is a cascade from you know from longest horizon to shortest. It starts with a five to ten year courageous vision. Where is the business actually going? Painted vividly enough that the team can describe the same picture without prompting. A three-year ambition comes next. If that's where the business is going, where does it need to be in three years to stay on track? Then this year's milestones. Given the three-year ambition, what has to be delivered this year? Next, 90-day rocks. Given this year's priorities, what are the things that absolutely must be delivered in the next 90 days to make sure we hit the milestones? And last, but certainly not least, in fact, most importantly, a weekly focus workshop. Each week the top team sits down and answers one question. Are we on track or off track with the rocks? If off track, what does the team need to do together to get back on? The thing that makes this work mechanically is the 90-day horizon. It's short enough that things actually finish and it's long enough that meaningful change can be designed and delivered. And it gives loss adversion nothing to bite on because the owner isn't being asked to give up an idea forever, just to defer it past the next 90 days. If it still matters in October, it can be a rock then.

SPEAKER_00 15:10

Nothing is killed, things are sequenced.

SPEAKER_01 15:15

And when this process runs well, the owner stops being the cart horse pulling the cart and becomes the person steering it. Their job becomes course correction and direction, making sure the cart is still pointing at the right destination, not heaving it forward themselves. However, most teams, when they first try, end up with a list of things they will do, not a result they will deliver. Roll out the new CRM, run the supplier review, get the production line software in. That's precisely why they fail to deliver their expectations. It's the same old, same old and delivers the same result. Which, as an aside, is how Einstein supposedly described Insanity, doing the same thing time and time again and expecting a different result.

SPEAKER_00 16:03

90-day rock done well has two properties.

SPEAKER_01 16:08

First is alignment. Every member of the top team can see how delivering it moves the business towards the milestone, the ambition, and the longer-term vision. And that cascade remains intact, and the work isn't orphaned, so it's not sitting over here by itself. Secondary are second is that you know that they need binary success measures. At the end of 90 days, did we deliver this yes or no? Not 60% there or 93% there, or sort of. It's got to be either yes or no. And by the way, setting those success measures is much tougher than you might imagine. Even with my hands-on help, it takes teams up to a year, sometimes longer, before they consistently write rocks that pass both tests without challenge.

SPEAKER_00 16:59

So where do you start?

SPEAKER_01 17:01

Well, this approach only works if there's a destination to test priorities against. So implementing the traction flywheel without setting a courageous vision is just another bloody planning ceremony, another planning system. And and there's a moment in Alice in Wonderland where Alice asks the Cheshire cat which way she should go. Where do you want to get to? he asks.

SPEAKER_00 17:26

I don't really know, says Alice. Then any direction you want will take you there. So start by getting clear in your courageous vision.

SPEAKER_01 17:39

What does this business look like in five years' time? Not in revenue terms only, in the detail of the thing. What does the team look like? What kind of customer is it serving? What problems has it solved by then that it hasn't solved now? The richer and more vivid you can paint that picture, the easier everything downstream becomes. Without it, you have nothing to test priorities against.

SPEAKER_00 17:59

So every new idea looks plausible.

SPEAKER_01 18:04

With it, the question, does this get us closer or further to our destination has an actual answer, a genuine yes or no. If you're like most owners hearing this, you're probably thinking, quite reasonably, that it sounds like another planning system, the kind you've seen, tried, and put in the shelf because it was bloody useless. And many revelations, revelations, many revolutions of the earth ago when I was head of marketing and strategy at International Trade and Banking at NatWest, we'd we would put together the three-year plan. We'd review it, approve it, and send it up the line. Tony Shaw, then chief executive of Nat West Corporate Banking, would review it and approve it. And then it went on the shelf. And after a few months, the day-to-day would take over and there'd be little beyond a cursory glance at the three-year plan. The rest of the year would unfold, the world would change, and our wonderful plan was broadly irrelevant and undeliverable. That three-year plan was never a living thing. And a year, never mind three, is an awfully long time for a static document to stay accurate. What makes the traction flywheel different from that experience is the weekly rhythm. They're not something the 90-day rocks are not something the team produces once and then forgets. They are objectives the team discusses every week. Are we on track with the rocks? Where are we stuck? What do we need to unblock? When something changes, and something always changes, the team adjusts inside the rhythm rather than waiting for the annual review to catch up. And that's the difference between your typical planning system and a living, breathing way of running the business. The other thing it does over time is build momentum, hence flywheel. Once the team delivers a couple of 90-day rocks, then a couple more, the energy that came from pushing every initiative uphill stops being needed. The team starts to believe they can deliver what they say they will because they've just done it three quarters in a row, and eventually the owner isn't pushing at all. They're nudging, course correcting, steering. Much easier way to run your business. The other good news about that is there are three upsides for the value of your business if it's run this way. As I mentioned earlier, the first thing is that profits will be higher. That Stratford Analytics work corroborated by the value builder research gives you that 7.5% delta profit delta on the business that built structure versus those that didn't. And that higher EBITDA on its own increases the valuation. The second is that the multiple applied to that EBITDA is higher too. A buyer looking at the business sees less risk. The owner isn't the linchpin, the TMR. The business knows how to deliver change, which means the buyer's own integration program will land in place that knows how to absorb it. That reduction in perceived risk shows up as a higher multiple. Higher EBITDA multiple sorry, higher EBITDA multiplied by higher multiple is the double win. And that's the single biggest difference between two engineering businesses with the same revenue but different valuations. The third is optionality at the deal table. If a buyer wants to use the business as a platform company company, something to bolt acquisitions onto, they'll pay a premium for one that has the operational discipline to do that cleanly. Second part of optionality is if the owner doesn't want an earnout, this kind of business lets them walk away on deal day. Because the business doesn't need them to keep it moving. And earnout structures exist precisely because buyers don't trust the business to run without the finder. Whereas a business with the traction flywheel embedded has already addressed that issue.

SPEAKER_00 21:56

Okay. Time to wrap up. Hard Hughes died in 1976.

SPEAKER_01 22:06

The Spruscus still exists, preserved in the museum in Oregon, where you can stand under its 320-foot wingspan and try to imagine what it would have done or what it would have achieved if it had been finished on time before the war ended. Unfortunately, it's a monument to what happens when ideas outrun finishing. Hughes had more ideas, more capital, and more raw capability than almost any business owner who has ever lived. What he couldn't consistently do was convert that capability into delivered outcomes. The pattern was visible in 1942 when he was at the peak of his powers and visible all the way through to his death 34 years later. The owners I work with aren't hard Hughes. Sadly, they don't have those resources. But the question for them is the same one I'd want to ask Hughes if I can meet him in 1942. What's in limbo? Not the projects you're still excited about, the ones that have been 60% complete for a year, the ones that completed have made no discernible difference. The initiatives the team have stopped asking about, the strategic moves that were going to change everything two summers ago, and now you don't come up in conversation.

SPEAKER_00 23:23

The question after that isn't what to do about any one of them. It's about what's missing from the way you run the business that lets so many of them end up in limbo in the first place.