Note, this article is directed at companies running an Australian financial year (July - June). For other financial year cycles, simply replace “now” in the article title with “early Q3”.

This time of year is a very busy time for me. As well as my ongoing client portfolio I also start getting enquires from potential clients who want to start their Scaling Up journey at the start of the financial year. Starting the Scaling Up process in June/July is better than not starting it at all, but it’s not the best time. Here’s why!

If you are not already working with a growth system, it takes a while to implement some of the prerequisites and fundamentals before you can start on your strategic growth. Even proven growth systems like “Scaling Up” and “The 3HAG Way” need you to have got a few things in place before you can see the benefits.

Starting the process two quarters before the start of your financial year gives you time to bed things down so that when your new financial year starts, you can focus on executing strategically and not just fixing the common problems that are slowing most businesses down. Common problems like people issues, poor execution and limited cash reserves.

Here is what I often see in the first two quarters of implementing growth systems with my clients:

Long term “Reason for Being” and Goals (your North Star)

If the business hasn’t discovered their reason for being or their long term goals we need to get clarity on what these are. Doing this before we set our strategy means we can be clear on where our strategy should be taking us. After all, if we don’t know where we are going, we can take any road!

Unhealthy Leadership Teams

When I start working with leadership teams I often wonder who will still be on the team in 2 - 3 quarters. Leadership teams often evolve as we get clear on our accountabilities and as we apply focus and discipline on execution.

Ultimately, this is about getting the right people on the bus, as Jim Collins says “the right people in the right seats doing the right things, right”. Let’s face it, if all was well with the leadership team the CEO would have no need to call me in.

Poor Execution - No Priorities, Targets and a lack of an effective meeting and communication cadence.

Businesses often don’t have clear priorities and targets for the short to medium term and it takes a bit of practice to get this right. I often find that the first set of targets and priorities a team defines are wildly optimistic. After all, human nature is to over-estimate what we can achieve in the short term (but under-estimate what we can achieve in the longer term). The next set of targets and priorities is then overly cautious and it is normally the 3rd quarter before the leadership team is setting measurable and achievable targets and priorities. Going through this “calibration” process before the start of the financial year means we can hit the ground running when we get to Q1 in the next financial year.

Also, before we can start to execute strategically, there are often system, process or infrastructure issues that need to be addressed. Doing these now (in Q3 and Q4) means we can then focus on more strategic or growth oriented priorities in the new financial year comfortable that they are now addressed and well out of the way.

Low Oxygen Reserves (Cash)

Growth as you know, sucks cash so having two quarters to fix any cash issues gives us time to build up the cash reserves required for the more strategic investments we will need to make in the new financial year. As part of my coaching practice I use tools like the “Cash Flow Story” to identify and address any cash issues in the business.

Why now is the best time to start

This is why over the years I have been working as a Scaling Up coach, I’ve noticed that businesses that start their preparations two quarters out (i.e. Now!) are much better prepared than those that start at the turn of the financial year. It makes the leadership team’s job so much simpler as they get the chance to fix the plane’s engines before take off; so much easier than trying to fix the engines whilst in the air.

If you would like to get ahead with your annual and strategic planning for FY 2023, message me or give me (Ged Roberts) a call on +61 415 534239 or email me at [email protected].