Success is a good habit to get into

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Chris Leahy

Partner

It's no coincidence that Stephen Covey’s The 7 Habits of Highly Effective People has sold some 30 million copies. Business people all round the world recognise the power of habits – patterns of positive behaviour that become almost automatic and make us more effective at our jobs

In the video above, Fordham Partner Chris Leahy adds his own insight into the power of habits: Good habits are formed in bad times, bad habits are formed in good times.

With Australia emerging (albeit in fits and starts) from bad times into good times, let's look at some of Chris’ ideas about habits that will make your business better. 

Make planning habitual

According to Chris, one of the most powerful habits a business can get into is having a planning culture – a culture where a regular, organised approach to planning is second nature. In brief this means:

  • Understanding where your business is today
  • Having a clear idea of where you want it to go
  • Outlining the key “missions” that move the business towards those goals
  • Giving your people the resources, support and autonomy they need to achieve those goals – and clear set of KPIs to direct them.

For Chris, the crucial point is that a plan is not something you create, then shelve. It’s something you work with every day. So that planning becomes a habit. 

Get into the habit of reviewing operational effectiveness 

We’re all human and when times are good, it’s easy for even the most conscientious business owner to lose some of the disciplines that made them successful in the tough times. 

Chris Leahy says chief among those lost disciplines is cost management, especially the fixed costs that somehow ‘creep’ into your day-to-day operations. Some of his practical suggestions to combat that complacency include:

  • Regularly reviewing costs including subscriptions, Direct Debts etc – it’s easy to find costs that have become habitual – but not necessary
  • Check your utility bills to see whether you can get a better deal 
  • When funding employee benefits (phones/car/super etc) take advantage of economies of scale – ask for scale discounts from suppliers to make those benefits more affordable.

Think roles when planning, communication when managing

A key part of the planning disciplines Chris espouses is to think of your business structure in terms of roles and activities, not people. Indeed, Chris suggests that your organisational chart should not feature people’s names. That helps you to focus on what you need to do to drive your business forward. 

Once you’ve created a team with the right skillsets your focus can switch to the people in those roles – and that’s where constant, personal communication becomes so important.

Good habits pay

Paying attention to your business habits does more than simply improve efficiency and profitability. 

According to one of the key thinkers on the power of habits – Charles Duhigg, author of The Power of Habit - creating good habits has the added benefit of reducing the cognitive load involved in running your business. 

If you can make things like cost reviews and planning habitual, you free up your brainpower to focus on what really matters. Your strategy – and your customers. 

Like to chat about your business planning and strategy? Contact your Fordham Partner


This article has been prepared by Fordham Business Advisors Pty Ltd (Fordham) ABN 77 140 981 853 and Perpetual Trustee Company Limited (PTCo) ABN 42 000 001 007, AFSL 236643. Perpetual Private advice and services are provided by PTCo. To view the Perpetual Private Financial Services Guide, please click here. Fordham’s liability is limited by a scheme approved under Professional Standards Legislation. It is general information only and is not intended to provide you with advice or take into account your objectives, financial situation or needs. You should consider, with a financial adviser, whether the information is suitable for your circumstances. To the extent permitted by law, no liability is accepted for any loss or damage as a result of any reliance on this information. This information is believed to be accurate at the time of compilation and is provided in good faith. Fordham is part of the Perpetual Limited group.