Content Contributor: Victor Hyman, ClimateCare
In August, I wrote about how solving your biggest problem - finding the right people - is really dependent upon first figuring out why they should work for you.
In fact, many of the problems that you encounter in running your business have their roots in not having a clear understanding of your mission, vision and values. Once you understand and can clearly articulate your mission, vision and values you can start to hone in on what Jim Collins calls your hedgehog concept. Imagine three intersecting circles. Your hedgehog is at the intersection of that thing that your business can do better than any other in the world, that you are passionate about and that you can make money doing.
Things get tricky when you have multiple opportunities. Without a clear understanding of the kind of work your business is really good at, passionate about, and can do profitably you are likely going to get pulled in competing directions and get distracted by opportunities that don’t fit.
Great companies will have many one-in-a-lifetime opportunities but opportunities that don’t fit inside your hedgehog are not opportunities, they are distractions. How can you tell the difference?
I have run this exercise with our ClimateCare member companies and over time they have strengthened their understanding of their hedgehogs, figured out what they should be doing and even more importantly, what they shouldn’t be doing.
Start by thinking about what your company can be best in the world at, and what it can’t be the best in the world at. This can be tricky so I will give you an example of a company that I think really gets this - Steam Whistle Brewing. You’ve probably heard their ads and seen their billboards.
They do one thing really, really well. They make one kind of beer, a pilsner. They don’t make a lager, they don’t make an ale, stout, porter or anything flavoured or seasonal. One beer 365 days a year.
For our ClimateCare members this means being residential service, maintenance and replacement HVAC contractors, or what we like to call being home comfort retailers. Not commercial. Not residential new construction.
Next you need to think about what drives your economic engine. How can you most effectively generate sustained and robust cash flow and profitability? And, what is the one defining metric - profit per x - that has the greatest impact on your economic performance. It helps if you pick something that is in demand. When Steam Whistle picked a pilsner as their single product it helped that pale lagers (of which pilsner is a variety) are the most popular type of beer sold in Canada. At ClimateCare we understand the importance of revenue per crew day. If we can’t do the job in a way that ensures we are profitable to our required level we pass. We are happy to leave that kind of work for people who have figured out how to make money doing it.
Finally, you need to be passionate about it. What about HVAC really lights you up? For some it will be sophisticated hydronics systems, for others it may be controls, other people love hearth. For most of our members it is service. They are passionate about providing their customers with the best customer service experience possible. And sometimes that means telling their customer that they aren’t the best contractor for the job.
Now back to these three circles. You need all three. If you have passion doing something that you are the best in the world at but you can’t make money doing it, you have a hobby, not a business. If you are passionate about it and you can make money doing it but you're not the best you will find yourself pushed out by your competitors who are better than you. If you are the best in the world and can make money at the same time, why do you need passion for the work? Because without passion everyday will be that day that you hate until you are ground down and quit.
Do you think your hedgehog is centred on residential home comfort retailing? Are you interested in learning more about how ClimateCare members have worked on developing their hedgehogs to grow their businesses so they can have more fun and make more money? Please check out our website at https://www.climatecare.com/become-a-member/ and connect with me at email@example.com
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