The business you accidentally built may not be a bad business at all. It might be profitable, respected and capable of supporting everyone who depends upon it, yet still deserve examination simply because good businesses can drift just as easily as struggling ones. Success can demonstrate that something works without necessarily proving that it remains what the owner wants.
There must be thousands of business books explaining how to run a business. How to grow it, how to market it, how to employ people, how to improve productivity, how to sell more, how to lead, how to negotiate, how to systemise and how to scale are all represented somewhere on the shelves. Walk into the business section of a decent bookshop and there is certainly no shortage of people prepared to explain how something should be done.
What I am less convinced about is whether we spend nearly enough time asking why we are doing it. That question sounds simpler, but I suspect it is considerably harder because “how” usually offers an instruction while “why” demands an answer from the owner. Somebody else can teach you how to build a larger business, but they cannot decide whether building a larger business has anything to do with the life or business you actually wanted.
Perhaps that is one of the reasons the how has become such a large industry in itself. It can be packaged into ten steps, delivered from a stage, placed into a workbook, incorporated into software or converted into a consulting program with somebody standing beside you making sure you follow the process. The why is far less cooperative because the answer may be different for every person in the room, and nobody can really sell you your own reason for being there.
That distinction matters because a great many businesses seem to be built from the outside in. A book suggests something, a conference speaker recommends something else, a competitor launches a new service, a customer asks for something different, an employee identifies an opportunity and a technology provider promises an improvement. None of these suggestions necessarily lacks merit, but when enough of them are accepted without being passed through the filter of why, the resulting business may become very different from anything the owner consciously chose.
I have seen owners reach a point where they look around the business and almost seem surprised by what surrounds them. There are more employees than they ever expected to manage, services they never intended to provide, customers they would probably not seek today, equipment purchased for opportunities that never quite developed and software systems added to solve yesterday’s problems. Nobody deliberately sat down and designed this particular combination, yet there it is, functioning every day and demanding to be fed.
That is the business you accidentally built, although “accidentally” should not suggest that nobody made the decisions along the way. The owner probably made nearly all of them, and many may have been perfectly reasonable when considered in the circumstances existing at the time. The accident lies less in the individual decisions than in failing to notice what all those decisions eventually became when placed together.
It does not usually happen through one catastrophic mistake. More often, hundreds of individually defensible decisions accumulate until the accumulation itself starts behaving like a strategy. Each decision makes sense in isolation, but nobody stands far enough back to ask whether all those sensible decisions still belong in the same business or serve the same purpose.
Perhaps this is where our almost Spock-like Logical Bystander deserves another appearance. Strip away the history, emotion, loyalty and explanations, then allow somebody to look at the business simply as it stands today. Why do you offer this service, why are you employing that many people, why is that customer still being serviced, why do you own those vehicles and why are three different systems doing variations of the same job?
The answers might all be reasonable. We needed it then, an important customer asked for it, our competitor introduced it, the government provided an incentive, we had spare capacity, somebody convinced us there was a market or we thought it would lead somewhere else. The Logical Bystander might nod politely at every explanation and then ask the question sitting beneath all of them: what was all of this meant to achieve?
That question returns us to the why. It asks us to move beyond explaining how each piece entered the business and consider why the entire collection deserves to remain there. The distinction is important because history can explain almost anything without necessarily justifying its continuation.
The business world has always been more comfortable with the how because how can be replicated. Somebody can show a room full of people the same sales process, pricing model, marketing funnel, management system or expansion strategy and reasonably explain how it works. Why is more troublesome because the answer for one owner may be completely unsuitable for the person sitting beside them.
One person may genuinely want to build a national organisation employing hundreds of people. Another may want a highly profitable business with six employees that allows them to collect their children from school, while somebody else might want to build something saleable and eventually walk away. Another owner may be perfectly happy extracting strong cash flow during their working life and directing it into superannuation, property or other investments rather than attempting to create something that survives them.
None of those ambitions is inherently superior to the others. They simply represent different destinations, and different destinations inevitably require different roads. The problem begins when an owner adopts somebody else’s how and discovers years later that it was designed to satisfy somebody else’s why.
Growth is perhaps the easiest place to see this happen. Business literature, advisers and success stories understandably spend considerable time talking about growth because growth can be exciting, measurable and commercially valuable. Yet before growth becomes a strategy, there remains a deceptively awkward question that perhaps deserves to be asked more often: why do you want the business to be larger?
The answer may be compelling. Greater scale may improve purchasing power, spread overheads, create management depth, open new markets or eventually produce something capable of being sold. Equally, there are businesses where growth increases turnover, employees, working capital requirements, debt and complexity without materially improving the owner’s return or quality of life.
That does not make growth wrong, nor does it suggest remaining small is somehow noble. It merely means the how of growth probably deserves to arrive after the why has been properly considered. Once the destination is understood, growth can be judged according to whether it helps the owner move towards it rather than simply because growth itself has been presented as the destination.
Competition can produce the same drift. A competitor lowers prices, adds weekend trading, introduces delivery or launches another service, and suddenly the owner feels compelled to respond because nobody wants to watch business walk down the road while they stand still. Repeated often enough, however, reaction to competitors can become a peculiar form of outsourced strategic planning.
Before long, competitors are influencing your pricing, services, opening hours and investment priorities. You may still own the shares and carry all the financial risk, but somebody across town is quietly designing significant parts of the business. Perhaps the better question is not merely how we respond, but why their decision should be allowed to alter ours.
The shiny new thing works much the same way. Artificial intelligence, automation, digital marketing, subscription models, cloud systems and whatever appears next can all create enormous value when they solve a genuine problem or improve something worth improving. The danger is not the technology itself; the danger is allowing excitement around the how to replace the discipline of asking why it belongs there.
A new system can therefore be technically brilliant and strategically unnecessary. A new product can sell well while distracting the business from something considerably more profitable, and a marketing campaign can generate leads the business was never particularly suited to service. Success at doing something does not automatically prove that the thing was worth doing in the first place.
I am certainly not arguing that businesses should remain frozen in time. CANEI — Constant and Never-Ending Improvement — has always appealed to me precisely because standing still is rarely a sensible long-term position, and improvement remains necessary even when an owner is satisfied with the overall size of the business. Improvement, however, is very different from accumulation because improving something requires an understanding of what you want it to become, while accumulating simply requires another opportunity to say yes.
Sometimes the most intelligent improvement is subtraction. A product can be removed, an unprofitable customer can be released, duplicated software can be abandoned, an unnecessary procedure can disappear or a business division can be closed. None of those decisions necessarily makes the business smaller in any meaningful sense because a simpler business with stronger margins, better cash flow and clearer direction may be considerably stronger than the larger version it replaced.
This is also where the Discipline of Boring earns its place. While everybody is looking for another growth strategy, there remains invoicing, debtor collection, pricing, margins, cash flow, training, documentation, tax provision and all the other activities unlikely to attract a thousand people to a seminar. They are called boring largely because they are familiar, not because they are unimportant, and they tend to become considerably more interesting when they have been neglected for long enough.
Strategic accumulation often occurs because boring questions have been displaced by exciting answers. A new product looks more interesting than reviewing the profitability of the old one, another customer appears more exciting than checking whether the existing customers are worthwhile, and a new system sounds more progressive than determining why the current process does not work. Activity can create the sensation of progress, but the sensation and the result are not always the same thing.
The accounts often reveal the distinction eventually. They may show record turnover accompanied by weaker margins, additional employees without corresponding profit improvement or increased borrowings supporting growth that has yet to produce additional cash. The numbers are rarely capable of explaining the entire story, but they can certainly suggest when the story deserves another reading.
That is one of the themes sitting beneath What the Accountant Saw. The figures are not merely an historical report card to be filed away after the tax return is completed, because they are evidence of decisions already taken. Sometimes they show that a business has gradually become something different from the one its owner still imagines they are running.
The owner may still describe the business using language that was accurate five years earlier. Meanwhile, another division has become dominant, an old service has stopped earning acceptable margins, payroll has doubled, working capital has tightened and the owner spends most of the week managing people instead of doing the work they once enjoyed. None of those things necessarily represents failure, but collectively they may suggest the business has moved while the owner’s understanding of why they are doing it has remained behind.
If I were sitting beside that owner as the “silent” partner we always tried to be at Banks Consultancy, I doubt my first question would be how to fix it. Before reaching for another answer, I would want to understand what the business is meant to do for the person who owns it, because without that knowledge any recommendation risks becoming another layer of accumulation. What are we actually building here, why are we building it and what is this business supposed to make possible?
Those questions can be uncomfortable because the answers sometimes expose contradictions. An owner may say family time is important while continuing to build a business entirely dependent upon their presence, or talk about eventual sale while retaining every important customer relationship personally. They may say they want financial freedom while continually reinvesting every available dollar into expansion, and none of those contradictions requires judgement before it deserves examination.
The issue is simply whether the actions and the stated destination still belong together. People are entitled to change their minds, alter their ambitions and choose a different destination as circumstances evolve. What concerns me more is when the destination has never consciously changed but the daily decisions have been travelling away from it for years.
That principle sits quietly behind The Little Blue School Book as well. Whose definition of success are we using, and how much of it did we actually choose for ourselves? If the business is becoming larger, more complicated and more demanding, it may be worth asking whether that genuinely serves the owner’s ambition or whether growth has gradually become the default definition of success.
It is surprisingly easy to inherit somebody else’s destination. The industry measures success by turnover, the bank measures it through lending capacity, the business coach talks about scale, the accountant talks about profit and the marketing consultant talks about leads. All of those measures can be useful, but none of them necessarily answers why the owner started the business or what they want it to provide.
Perhaps the most revealing exercise is therefore not to ask what should be added next. Imagine instead that you were offered your current business for sale today, exactly as it stands, without the history explaining how each component arrived. Would you deliberately build it this way, and could you explain the reason each significant part of it deserves to exist?
Would you choose the same customers, products, employees, premises, borrowings, systems, operating hours and obligations? Would the answers be based upon what each component contributes today rather than what somebody hoped it might contribute three or five years ago? More importantly, could you connect those answers to the reason you want to own the business at all?
That exercise does not require the owner to tear the business apart. History matters, relationships matter, employees matter and changing direction carries consequences of its own, so there is no virtue in destruction merely to prove that reflection has taken place. What the exercise may provide is a distinction between what has been deliberately chosen and what has simply accumulated.
There is another reason the why deserves revisiting occasionally because the answer itself is allowed to change. The dream held by a thirty-year-old starting a business may not be identical to the ambition of that same person twenty years later. Children arrive, health changes, wealth accumulates, responsibilities change and eventually the business that once represented freedom may begin to feel remarkably like the job the owner originally escaped.
Revisiting the why is not admitting that the original dream was wrong. It may simply mean recognising that the person pursuing it has changed, and the business deserves to be considered against the person standing there today rather than the one who first opened the door decades earlier. A deliberate change of direction is very different from drift because one involves choice while the other is discovered after the journey has already taken place.
That is why I become wary whenever somebody announces the latest formula for business success as though there were only one destination available. The how may be excellent, proven and entirely legitimate, and the person presenting it may have achieved extraordinary things by following it. Before adopting it, however, the owner still has one responsibility nobody else can assume: deciding whether that particular road serves their particular why.
The business you accidentally built may not be a bad business at all. It might be profitable, respected and capable of supporting everyone who depends upon it, yet still deserve examination simply because good businesses can drift just as easily as struggling ones. Success can demonstrate that something works without necessarily proving that it remains what the owner wants.
Perhaps the next decision therefore deserves a different starting point. Instead of immediately asking how we can add another product, employ another person, increase turnover, open another location or adopt another system, it may be worth asking why we want to do it and what part of the business we are deliberately trying to build. The answer may still be to proceed exactly as planned, but at least the decision then belongs to the owner rather than to the accumulation of noise surrounding them.
There will always be another business book explaining how, just as there will always be another expert, system, technology, opportunity or competitor providing an answer to something. The quieter discipline is remembering that before all those answers sits a question nobody else can properly answer for you. Why are you building this business in the first place, does the business standing in front of you still resemble that answer, and is the next decision taking you deliberately towards it or merely adding another piece to the business you accidentally built?
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