The founders of the R700 million business The Creative Counsel, Gil Oved and Ram Neu-Ner reveal why it’s better to think big, and how stepping away from the daily activities of your business will help you to grow.
It took Ran Neu-Ner and Gil Oved, the founders of The Creative Counsel, five years to hit their first R100 million in turnover. While it’s an impressive number, they firmly believe it should have happened much quicker.
“We were so busy working in the business that we weren’t working on it,” they say, adding that they looked up to find they’d hit the R100 million mark, and only then realised a key point: They had managed to build a large organisation, but their mind-set was geared towards a small business.
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Oved explains. “One of the biggest reasons why our early growth was slower than we’d have liked was our planning processes,” he says.
“We needed a five year view, but we only had a one year view. We didn’t trust our own growth plans, and as a result we didn’t the guts to hire the right people for the right jobs or the proper systems in place. We didn’t believe enough in ourselves and our ‘big’ business.”
For Oved and Neu-Ner, mind-set is one of the biggest growth factors for a business. “You need to plan for growth. It requires the right people, processes and systems, and those are all things that take careful planning,” says Neu-Ner, adding that The Creative Counsel started hitting a proper growth curve when he and Oved realised this and changed their attitude.
Invest in top talent
Step one was putting a larger emphasis on hiring the right people. “Too many entrepreneurs know that they should hire people better and smarter than them, but they’re scared. They don’t want their position as business owner, leader and largest shareholder invalidated,” explains Oved.
“In fact, the opposite is true. As the entrepreneur, you’re the one who takes the risk, who recognises the talent and who brings a winning team together. This ability completely validates your position.”
Neu-Ner agrees, adding that it’s this realisation that usually coincides with a business’s tipping point, because hiring top talent allows business owners to stop focusing on day-to-day operational tasks, and start focusing on real growth strategies.
But what of the money factor? Companies that are focused on growth might not yet have the budget for top talent as they keep things lean and reinvest all profits into the business.
“In terms of job titles – and this is true of pretty much all job titles – the difference in cost to company between a mediocre employee and the best in the market is about 20%,” says Nue-Ner.
“The difference in output is 100% though. We’ve personally learnt to just pay the money. A good financial director costs about R250 000 per year more than an okay financial director, but the mistakes that the good FD stops you from making can run in the millions. We’ve calculated that if we’d had that vision years ago, we would have saved millions.”
Another key point that Neu-Ner and Oved highlight is that entrepreneurs have a tendency to believe that their personal touch is all important – if they aren’t involved in everything, the business won’t succeed.
There are two primary problems with this idea. The first is that businesses that are so reliant on the founder are very difficult to sell. Great businesses are based on systems and processes and can scale without the direct daily input of the founder.
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The second is that business leaders should be focused on strategy and big picture thinking. Their role is to focus on transformational tasks. If they want to be involved in every little aspect of the business, they’re spending most of their time on transactional tasks, and the business will never grow.
“Eventually, if you’re lucky, and you’ve still managed to build a sustainable, growing enterprise, the business will get too big, and you’ll need to let go anyway,” says Oved.
“For us, if we’d let go sooner, we’d be ahead of the curve. We wasted a lot of time and resources thinking small, instead of focusing on the bigger picture and letting our teams deal with the transactional stuff.”