Taking control of your business

With the global financial crisis affecting struggling businesses now more than ever, it is time for business owners to take back control with a ‘can do’ attitude to focus on how they can make their business a success, rather than agonise over factors beyond their control such as interest rates and the state of their super. So how can businesses regain control of their affairs for a fresh start to the new year?

So much is happening in the global economy. Meltdown, turmoil and crisis are words being thrown around on a daily basis, and probably will be for the foreseeable future.

A client recently asked for help in his small business in the leisure industry. Trade sales were drying up and he was looking at cost control and reducing staff numbers. He had real fear for the future.  When we looked at his business, he acknowledged that retail sales were booming, and he didn’t have enough staff to service this area. Further examination showed a huge untapped opportunity to partner with, and educate, his trade clients in their marketing. By doing this, his trade clients could expand their retail markets, serving a larger base without his own business taking on more retail sales staff. This is a classic win-win. He takes control of something which he can impact on; others benefit and the area he was concerned about grows as well. All this businessman had to do was to get back his internal ‘locus of control’.

The theory of locus of control was developed in the 1950s and details how people with an internal locus of control see themselves as being responsible for the outcomes of their actions and hence responsible for their own destiny. Lotteries would not be a profitable business in a world full of people with an internal locus of control. At the other end of the continuum, people with an external locus of control see environmental factors (or luck) as being more responsible for the outcomes in their lives and for their ultimate destiny. The theory was based in research, and became enshrined in modern psychology following the research by Martin Seligman in 1965 leading to the ‘learned helplessness’ model.

Seligman and his team found that dogs’ behaviour changed dramatically and unexpectedly when subjected to random feedback (pain). Some of the dogs learned to become helpless when their behaviours made no difference to the feedback they got. They developed an external locus of control: they gave up.

The outcomes of this research and its ramifications changed the face of psychology, and showed that the locus of control is largely learned, and importantly, can be re-learned. Whole programs are now focused on assisting people to take back their internal locus of control.

Mind your own business
Sometimes in business, and in our personal lives, we find ourselves caught up in life’s current, drifting into situations and getting results we had not counted on. Some time back I had a series of events impact on me and my business in an unpleasant way. Given that I generally sit at the internal locus of control end of the continuum (as do many people who own their own businesses), having external happenings dare to impact on my results came as an unpleasant shock. The events seemed to be totally out of my control, and my actions did not appear to make a difference to the results.

Looking at Seligman’s research, I would be a classic case for learned helplessness had things continued unabated. However, I know enough about the human mind and its workings to understand that when an unhelpful pattern is settling in, creating a massive break in the cycle can cause huge differences in attitudes, beliefs, behaviours and outcomes. I sought assistance, worked though what I could impact on and what I couldn’t, then took a narrow-minded focus on what I could change. The result was like throwing a pebble in a pond. I am still feeling the ripples today.

Break the cycle in a big way

My leisure industry client detailed above was also creating a vicious cycle for himself and his business. In response to the negative media stories, he was convincing himself that the sky was falling in. When challenged about his beliefs and his current available business data which actually contradicted his beliefs, he shifted his position massively. Further conversations around the same subject showed a historical inertia in his business to offer a larger range of products to trade clients. Reframing this meant that he could acknowledge that the current market conditions rip up the history books. No business person alive today has been in the market we are currently in. There is no history for where we are.

So, the way forward is to take control of the present and put a focus on what is happening today. Not what might or might not have been real last year and certainly not creating imaginary scenarios of what might or might not be real next year.

Take mental control back

Taking mental control back through breaking this particular cycle puts you in a different frame of mind in business. Action and outcome focus with startlingly different, though not surprising, results. Sometimes we focus so much on the external events, only to find that in the struggle we are making no progress and simply exhausting ourselves getting nowhere. The events we are struggling against are just too strong for us. Instead we can take our focus and set our minds on what we can control; our thoughts, beliefs, direction and actions, and then let the ripple effect happen.

It may be that taking our locus of control back internally causes us to review business practices, products and markets. It may mean making some tough decisions. It may mean closing down part or all of the business. It may mean having different conversations with market sectors which we had traditionally ignored.

When you have an internal locus of control the decision is yours to make, with an external locus of control you hand that decision over to others like the banks or creditors. When we take stock of our situation, we find that focusing on a different short term goal will get us much closer to our long term goal with a lot less effort and a lot less risk.

New Year, new you

With the New Year upon us, is a great time to check where our focus is. Refreshing goals and breaking the full year goals down into bite-sized quarterly or monthly chunks creates a sense of control and paves a path to success for 2009 and beyond. Make sure your goals are energised and smart. SMART goals are those which we are very clear about and focused on. They are also few in number to ensure focus is kept sharp.

Keeping a focus on a defined end point assists to reclaim your locus of control. The saying goes: “begin with the end in mind”. An end point can be more easily defined when we use SMART as an acronym. Make sure your business (and personal, for that matter) goals are:

  • Specifically stated: Stated positively in present tense
  • Measurable: Think about what you will see, hear, smell, taste, feel and touch upon completion. What is the evidence that this goal is complete? Achievable: Can I achieve it by myself? What input/resources do I need from others?
  • Resources: What resources do I need? 
  • Time based & Towards: When precisely will this outcome happen?

“Breaking into a new market this year” is not a SMART goal. To make it SMART the questions to be answered include: When? How many clients? Which products? What geographical area? What percentage of the market do we need to achieve success?  What resources are required?

Keeping the vague wooliness out of our goals is the key to creating personal and business success in this coming year. While it’s possible to hit an invisible target, it is much easier to plan and to hit a visible one.

-Liz Cassidy, founder of Third Sigma International (www.thirdsignma.com.au), is a Brisbane-based executive coach who helps clients get great business, professional and life results.

Quiz

Focus on your locus

Where is your focus? Do you have an internal or an external locus of control?  Take Third Sigma International’s quick quiz to find out. Circle the answer most like you. Be honest!

QUESTION A B
Do good things happen

When you are prepared and open? To other people?
With a problem, would you rather Work out your responsibility and plan to fix it? Blame someone/ something else?

Are lottery tickets An occasional bit of fun? A key pillar of your future financial plans?

Is your goal setting Structured, reflected upon and updated regularly? Random. What’s the point? Life interrupts the best laid plans?

In investing are you more likely to Study trends, company performance and outlooks first? Take insider advice from an associate?

Do you believe in Planning? Luck?

Does stuff happen When you are an ineffective risk manager? All the time?
Are you insured For every potential event; business and personal? I think so. Not sure where the paperwork is though

Did you get where you are today by Self-investment; goal-setting and taking opportunities as they come? Being in the right place at the right time?

Do you see yourself as A self-made man/woman? Lucky?

If you answered A

6 or more times: You definitely have an internal locus of control. The current market may cause you some disruptions, but you are either already prepared or have some risk mitigation strategies in place. See you next year.

5 times or less: Hmm, have you thought of giving up your lottery tickets and investing your money in a cash saving account instead? You have an external locus of control. Try re-reading the article, and good luck with current market trends!

-Liz Cassidy is founder of Third Sigma International (www.thirdsigma.com.au) and an international speaker, trainer and executive and performance coach, assisting clients to create specific outcomes and increase results.

Related Stories