Aug 13, 2026 | Lean, Management
Best practice is a standard aspired to by many small businesses. Leaders look at what top-performing companies in their market do to maximise profitability, then attempt to duplicate those exact practices in their own operations.
If your business is currently chaotic and disorganised, looking toward industry best practices as a baseline is sensible. It provides clear guidance on where to allocate resources to start improving.
However, if you are already operating smoothly, blindly chasing “best practice” can actually hold you back. Why? Because best practice is, by definition, an average calculated across a wide range of businesses.
Averages are misleading
If Elon Musk walked into a crowded football stadium, the average net worth in that stadium instantly makes every person in it a billionaire on paper.
When viewed through that lens, setting out to hit an “average” suddenly isn’t so attractive.
Best practices are always a collection of individual processes designed to generate an optimal outcome for one specific business, in one specific competitive and regulatory context.
When you set out to duplicate someone else’s best practice, for example in a manufacturing operation with many individual steps, you can never copy every variable perfectly. Even if you get most steps 99% right, compounding works against you
You end up with a sub-optimal process that falls significantly short of your original goal.
Build your own SOPs first
A Standard Operating Procedure (SOP) is an individualised blueprint for how a task is executed within your specific business to guarantee repeatability. The ultimate goal is ensuring the procedure can be executed reliably by anyone, not just the current process ‘owner’.
Building detailed procedures for your core processes is a critical step in optimising performance. It is also the mandatory starting point for automation.
Regardless of what tech or tools you use, the primary challenge is to optimise the human process before you automate it. There is little worse than spending valuable resources automating a flawed workflow. All that guarantees is that you will deliver sub-optimal outcomes faster and at scale.
The bottom line
Rather than trying to match someone else’s standard of best practice, focus on optimising your unique value offering for your customers. Then work backward to build systems that guarantee consistent delivery. I call it ‘Hindsight planning’, and it is a key to strategic success.
Jul 30, 2026 | Analytics, Management
Assembling and leveraging the complex mix of information and capabilities required to ‘win’ is a challenge similar to climbing a slippery ladder.
Most rely on data, spreadsheets, and extrapolations, blended in with optimism.
At the bottom of this ladder is data. Raw, unfiltered, and almost useless on its own. Just numbers, words, events. Noise without context. Like a kids jigsaw puzzle upended in a pile on the floor.
The ‘ladder’ has five steps.
Data. The pile of numbers, littered around files, outside sources of information, and peoples brains, without context relevant to the questions being posed.
Information. You start sorting. Cleaning. Labelling. Structure begins to emerge. It’s janitorial, unglamorous, tedious, and essential. This is where many people mistake motion for progress.
Knowledge. Connecting dots delivers knowledge. You see cause and effect, frequency, variation, and importantly the outliers. You can answer questions like “What’s happening?” and “How often?” Knowledge is a map, but it is still two-dimensional.
Analysis. This requires you test the knowledge, isolate variables, run comparisons, identify the outcome drivers, and develop ‘what if’ models. You don’t just have answers; you know how strong the answers are, and where they might fall apart. It gives you that added dimension.
Insight. Here’s where the real game begins. Insight is not just about seeing patterns, it’s about seeing meaning. It’s the inflection point, where a thousand observations converge into a single, clarifying idea.
But insight alone is not enough.
Running parallel to this clean, rational ladder is a tangled, intuitive, and very slippery pole: wisdom. Hard to see, impossible to teach, and absolutely critical to success.
Wisdom doesn’t follow steps. It grows from pattern recognition forged from lived experience. Mistakes made, ‘hunches’ that turned out to be right, and often spectacularly wrong, opportunities misread or missed completely. It takes time, perseverance, an ability to learn, curiosity, and determination.
It’s what lets a seasoned operator say, “That’s not going to work,” without needing a single chart, and be right. It’s instinct layered over time, a mental shortcut engine built on scars, sweat, and sleepless nights. It’s experience distilled into reflex.
The irony is that the higher you climb the corporate hierarchy, the more you need that slippery pole of wisdom.
If you only trust the data ladder, you might build the wrong solution brilliantly. If you only trust the pole, you risk hubris.
But when you climb with both, methodical analysis on one hand, and wisdom on the other, you are better able to understand problems, see the wider context, and spot points of leverage.
That’s the difference between a strategist and everyone else.
Jun 2, 2026 | Leadership, Management, Marketing, Strategy
A ‘heuristic’ is a ‘rule of thumb’ that takes the place of conscious calculation in the interests of speed and reduction of cognitive load in our brain. Cognitive overload creates the ‘friction’ in our brains resulting in indecision and anxiety. Heuristics, or ‘mental models’ bring the cognitive load down to a level we can deal with efficiently.
It is a function of evolutionary psychology.
To survive, you had to make a choice quickly about that rustle in the grass. Ignore it too often and you could end up as tiger shit.
Remember, we are all survivors of those who ran in order to not take the chance with the rustle being a tiger.
We all use these mental models daily, usually unconsciously.
In 2009 Chesley ‘Sully’ Sullenberger ‘landed’ the Airbus A320 he was piloting in the Hudson River after a flock of birds shut down both his engines on take-off from La Guardia airport.
He ‘knew’ without doing the calculations that he would not make it back to La Guardia, or the alternative airport of Teterboro in New Jersey.
His only option was the river, or a crash landing in populated areas of New York, and he had seconds to make the choice.
Subsequent investigations eventually confirmed his choice.
Sully applied unconsciously, a heuristic, a framework that was a result of his extensive flying experience, and knowledge of the gliding performance of the Airbus A320.
No data, no standard operating procedure that was useable, he acted and saved the life of every person on the plane as a result.
We all have a set of heuristics in our heads. The cumulative result of our experiences with life, and the context in which we have lived. We can either understand and leverage them to the advantage of ourselves and those around us, or we can fail to recognise their presence and power.
In your business, you are applying heuristics every day.
Choices that seem automatic: which customer to serve, who to hire, sales conversion, leadership choices, all are made with the assistance of heuristics. They are an essential and integral part of our management, but are only valuable when they are built from valid experience and regular testing and review.
You need to update your heuristics with regular feedback in the manner of an ‘after action review’ type analysis. What worked and what did not, where to lay the chips next time around, where to double down, and where to run.
When left untended, heuristics can evolve in suboptimal ways. Don’t leave yours untended, they may save you.
Apr 9, 2026 | Management, Small business
The Reserve Bank hands down its next rates decision on 5 May.
The cash rate already sits at 4.10%. Markets and many commentators still expect at least one further rise on May 5, probably followed by at least one more. Against this backdrop, there is a federal budget trying to deliver on the social undertakings made to the electorate, while dealing with a structural deficit, soft consumer confidence, and geopolitical uncertainty, particularly as it relates to energy.
This is a toxic mix for SME’s, which despite being largely ignored by governments, are still the backbone of the economy.
That mix should sound familiar to anyone old enough to remember the 1970s. Growth stops, costs increase, consumers keep their hands in their pockets, and the cycle repeats.
That is when small businesses fail.
Whether the Reserve Bank raises again or pauses, the core message for SMEs stays the same.
Do not wait for certainty: Prepare now.
Tough times do not usually kill a business in one dramatic moment. They kill it by progressively tightening a dozen small screws at the same time. Debtors pay later. Stock turns slower. Quotes sit longer. Margins erode one discount at a time.
The businesses that come through rough periods usually do a few simple things early and do them hard.
- They preserve cash.
- They accelerate every cycle time in the business.
- They protect gross margin like it is oxygen.
- They stay close to good customers.
- They cut vanity spending and keep useful spending.
And they remember an old truth Warren Buffett expressed well: when times get tough, cash gives you options. Opportunity often knocks when nobody feels like opening the door.
The following specific advice has been heard many times, but once more will not hurt.
Know your cash position.
Know your true cash position every week, not intermittently once a month, every week, or better still, every day. Chase debtors hard, but with wit and humanity, as they are probably also suffering as you are.
Run a 13-week rolling cash flow forecast. Update it every week. Assume at least some customers will pay later than promised because they will.
Accelerate cycle times.
Every process has an established cycle time that ‘settles’ into a comfortable rhythm when times are OK. When times get tougher, those that can accelerate their cycle times will win.
This is particularly the case with your cash conversion time. To speed that up, quote faster, invoice the same day, chase deposits sooner, work operational assets harder, and reduce if not eliminate rework. Get jobs finished, signed off, and billed without dead time between steps.
The lessons of John Boyd and his OODA Loop are never so relevant as in a crisis.
Protect gross margin.
Tough markets tempt owners to discount just to close the sale. That usually backfires. The better tactic is to sell on value, drop unprofitable work and reprice where you can.
Complexity creates transaction costs, which are always hard to see. Removing complexity frees up cash to be used productively.
Keep your best customers close.
Your existing customers are cheaper to retain and increase your share of their ‘wallet’ than new ones are to win.
Call them, collaborate to solve their problems, check in before they complain, and ask for referrals and testimonials.
Cut costs carefully.
Across the board cost cutting is a desperate mistake. Do not slash the parts of the business that help you sell, collect cash, or keep customers.
Cut the ‘vanity’ and nice to have costs aggressively, not the activities that generate revenue, margin, and cash.
Tighten inventory management
Stock that does not move is just dead cash.
Reduce slow-moving lines, buy smarter, Increase visibility on lead times and reorder points. Stop over-ordering to ensure ‘safety stock’. Aggressive management of cycle times in your inventory can have a dramatic impact on working capital requirements.
Pareto the pareto
Not all customers, and products deserve to survive. The Pareto rule always applies, not always as 80:20, but it is there.
Identify the customers, products and jobs that produce real margin and reliable cash. Defend those first. and progressively eliminate those that do not contribute. When you have done the first round, do it again, you will always find more that can be productively removed. You are in effect, stress testing the revenue and cost generation base of the business.
This exercise intimidates many SME’s, who tend to form emotional ties to products, customers, and distribution channels. In tough times, emotion must be set aside.
Renegotiate early.
Banks, landlords and suppliers all hate surprises. They will listen more carefully and be more accommodating when they are a part of the process of ensuring bills will be paid, even if a bit late.
Secure facilities early. Reset terms where needed. Ask for flexibility while you still look like a good risk.
Keep hustling for sales
A weak market is not a good excuse for sloppy selling.
Tighten follow-up. Improve conversion rates. Shorten the path from enquiry to proposal to close. Make it painfully easy for the right customer to buy.
Stay visible
Marketing investments are often the first savings made in any downturn. Resist the temptation, as history clearly demonstrates that those that keep investing during the tough times come out way stronger when the worm turns. Besides, when others pull their marketing, you become more visible for no extra cost.
Be aware of bargains.
Downturns create bargains. Competitors stumble. Good staff become available. Assets get cheaper. Market share can move. Cash lets you act while others freeze.
Lift your prices.
This is sure to give some the ‘wobbles’ and is always difficult, but if you have done all the above, you will be delivering real value to customers. An extra dollar added to the revenue line drops straight through the P&L onto the profit line. There is no quicker way to increase financial resilience than to lift prices while holding volume. Even if you drop a bit of volume, do the maths, and 9 times in 10 you will be better off after the price rise.
Header credit: Scott Adams and Dilbert
Jan 19, 2026 | Management
The most important to do list is not the one you try and discipline yourself to do every day as a means to organise your life, set priorities, and be more productive.
It is the one you write that lists the ‘to do’ that others owe you.
We exist in communities, co-dependencies and interdependencies abound. When all those varied business and personal networks are considered as a separate list, shared with the ‘information debtor’ your productivity will increase.
In my work as a business coach, I find myself constantly reminding people that it is necessary to chase the money owed to you. Reluctance to do so is a red flag for failure. This is an example everyone understands, but many do not embrace, as the power of the negative response when you ask for what is owed overwhelms many.
Why is it any different for any other factor in our lives?
That expected response to an email requesting information by Friday. Has it come in? why not? To what extent is the slipping of deadlines impacting on your productivity, and commitments to meet the undertakings you have made to others?
A boss of mine years ago used to keep a little notebook.
In it he would record undertakings and deadlines I agreed to in the conversations we regularly had relating to the actions and outputs of the functions I managed in the enterprise we both worked for. He never had to highlight the fact that I had agreed to something, I knew it, and I knew his little book would ensure he did not let it fall through the cracks.
It worked. You should try it.
Jan 5, 2026 | Management
It is the new year, the season in which many start-ups are born, often influenced by the time and ‘out of the ordinary’ activities of the holiday season.
Before you jump in and mortgage the house for start-up cash, consider the following sins, all of which I have seen start-ups commit, which can lead down the gurgler on their own. The presence of several is almost always a predictor of disaster unless reversed very quickly.
I speak from hard-won and first-hand experience.
The strategies used to reverse them are many and varied, depending on the circumstances of the business. A tech start-up setting out to disrupt an existing market, or indeed create a new one, is entirely different to a start-up intending to steal market share from incumbents in a mature and stable industry.
Undercapitalisation
Insufficient working capital and absence of longer-term financial depth and resilience are equally deadly. Most start-ups I have seen drastically underestimate all the costs they will face. Failure to recognise all the costs and having the resources to address them leads to the undertaker.
Insufficient capital to make the required investments to create the product and operational infrastructure are equally dangerous. All the expenses must be paid as you find customers and service them.
The working capital requirement is (almost) always underestimated. Good budgeting and rolling performance measurement is essential, so you can anticipate the cash needed in the immediate future necessary to survive, or indeed, adjust expenditure to match the cash.
Not having enough money to get started ensures you will not get started. ‘Bootstrapping’ might be fashionable, lauded in the ‘start-up porn’ that infests the net, but is really challenging. However, it may be slow and tough, but it leaves you in control.
Poor cash management
Seasonality, and all sorts of things impact on the need for cash, and the timing of it coming in and going out.
People always underestimate the costs, and overestimate the cash inflow., and the timing of that cash.
13 week rolling cash flow forecasts are essential, they enable you to manage the peaks and troughs, and take advantage of the things that come up: to be opportunistic.
You must distinguish between fixed and variable costs. Identifying the drivers of costs makes the maths a bit more complex, but still essential. Identifying all the drivers is essential.
Variable costs are variable, but according to what??
Variable costs are driven by customers, as they drive the demand. Therefore, forecasting the flow of customers, and what they will buy is essential, i.e., a sales forecast. The more accurate your forecasts the better ability to manage variable costs and shape fixed costs will be.
Revenue generating activities.
Revenue generation is a mix of sales and marketing activity. Selling prices and customers are important, so do sensitivity analysis of price/customer traffic matrix.
As time moves on, sales forecasts should get better, so the productivity of your cash can be improved.
You must get the variables of sales forecasting as right as possible. Do rolling forecasts of sales
Understanding the dynamics of your break-even is important, it is probably the most underused metric in ‘start-up land’.
Poor record keeping and control
It is essential to make sure records are in order. Even for small businesses, it usually makes sense to contract a bookkeeper. While it is an expense, it frees up time, and more importantly, head space.
Keeping the books is a pain in the arse, but proper record keeping and internal controls are essential for managing operations, improvement, and regulatory governance, both public and private. If you must borrow money, sell the business, or raise equity capital, you will need good records.
Controls are the procedures that ensure that the records are accurate, timely, and available.
Documentation is essential: inventory, employees’ hours, sales, debtors, creditors, customer lists, price lists, and so on. You need systems to protect and manage the information.
Finally, safeguard your cash, control the receipt and payment of bills, you need to ensure there are controls in place to mitigate the potential of fraud, and to ensure assets and liabilities are handled properly.
This is the shit part of starting a business.
Records are a necessary evil. It will not guarantee you succeed, but failure to manage the information will ensure you fail.
Pricing is left to the last minute
Remember the old sales demand curve from economics 101. Too low, leave money on the table, too high. You miss out on sales.
Pricing is a complex process; it must play a key role in the strategic thinking of the business and must be done from the perspective of the customer. Too often I see businesses calculating their costs (usually wrongly) and just adding a margin, without any reference to the customer and volume matrix.
Not understanding their business model
This might seem a bit obscure, but I see constant mistakes made by SME’s because they do not understand the drivers of their business model. For example, the Senate enquiry into the Franchising industry that reported in mid-march 2025 slammed a number of the major franchise groups, especially the Retail Food Group, owners of Gloria jeans coffee, Crust Pizza, and a number of other franchise retailers. The report contains a number of emotional stories about the poor governance and management practises of franchisors, but when the emotion is removed, many of the failed individual businesses that signed up did not understand what they were signing up for. A franchisor makes their money selling franchises to franchisees, then clipping the ticket on all purchases and revenue, while charging for services such as accounting and advertising, on which they take a margin. Buying a franchise and not understanding the business model of the franchisor is just dumb.
Similarly, relying on supermarkets for your sales requires that you understand the way the supermarkets make their money, and the hidden and transaction costs involved in dealing with them.
Misdirected or lack of marketing.
Peter Drucker said the sole purpose of a business was to create a customer, and he was right. To create a customer, you need marketing, of some sort. It will rarely happen by osmosis.
You must know who your primary customer is, and how to reach them, engage them, sell to them, and have them coming back for more. Every interaction is an opportunity for a further one, building to a repeat customer who advocates for you, the very best form of marketing there is.
Unmanaged growth
You cannot outgrow your problems; you must fix them first. Cash flow and profitability problems are never solved by growth. Watching a business grow too fast is like watching a little kid trying to run, they trip over their feet. Their brain wants them to run, they know how to do it, but the foundations are not sufficiently in place to allow it to happen.
Processes need to be optimised, subjected to continuous improvement, documented so they can be scaled,
Everyone wants growth, but running out of cash is the cause of many successful businesses to fail. They fail being successful.
Growth is a huge consumer of cash, most often necessary before the results of the growth are reflected in the cash coming in. I have seen many seemingly successful businesses fail by trying to run before they walk reliably.
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