I attended a session promoting Grant Ian Gamble’s new book, The Affinity Principle, last month where he detailed his impassioned belief in the ancient Japanese principle of “ikigai.” It literally means “a reason for being.” He went on to explain that he works with others to help them uncover their own ikigai by contemplating four key questions. No matter what you call it, your business won’t grow without understanding its own ikigai and communicating it clearly to employees and customers (see figure 1).
What do you love?
Many CI businesses start because an aspiring business owner identifies a gap in the market aligning around their own passion. Integrator startups are a medley of technician-turned-entrepreneurs, outsiders with a passion for technology, and hard-nosed business veterans who have a plan to scale an offering nationally.
No matter which of these three personalities fit you best, ask yourself why you started the business and how far apart your current day-to-day is from the dreams that drove you to “work 80 hours to avoid working 40,” as Shark Tank’s Lori Greiner so aptly puts it.
Many business owners answer this first question with a few common responses:
- I love making people happy.
- I love technology system design and want to do it as a career.
- I see inefficiency and think I can build a better mousetrap.
Businesses can struggle staying true to the “What do you love?” question as headcount and revenues grow. While the business owner may have started the company because of one of the three reasons above, subsequent employees are signing on for completely different reasons. That’s a hard transition for many business owners as they struggle to fathom how everyone doesn’t see it their way. It takes all sorts of players to win the game, and the answers to this first question need to change in an effort to speak to everyone, not just the founder.
Stepping back from an owner mindset and thinking through the answer as a whole company, the answer may pivot to:
- We love simplifying technology for our customers.
- We love having a great place to work.
- We love watching people grow.
This isn’t an easy question to answer, but your employees already have their own reality, whether it’s the one you want or not. It’s vital to get everyone rowing in the same direction to drive engagement within your company while attracting A players from outside who buy into the shared vision.
Also by Henry Clifford: Stop Arguing with Your Customers
What are you good at?
In the same spirit as the “What do you love?” question, it’s vital that the business pivots from a “What am I good at?” mindset to a “What are we good at?” culture.
In the beginning, a typical founder might answer:
- I’m good at installing technology for my customers.
- I’m good at selling.
- I’m good at making my customers happy.
As you hire more employees, they’ll care about your reasons at first, but they’ll need more as the company grows. The answer needs to pivot to address the needs of the team:
- We’re good at delighting our customers.
- We’re good at innovating and coming up with creative ways to solve problems.
- We’re good at working together as a team.
The path from “I” to “we” is fraught with uncertainty and peril. It’s hard for some founders to make this transition. Many businesses operate using an ersatz “Santa and his elves” (former CEDIA board chairman Ray Lepper coined this term) model where the owner is the center of the universe. That works to a point, but breaks when Santa can’t touch every job, customer, or employee. That’s where the “we” pivot comes into play.
What does the world need?
This is a heavy question and the temptation to overthink it is tremendous. At the end of the day, service-focused CI businesses will continue to thrive because they are, in the words of Dominion Payroll’s David Gallagher, “local as hell.” Integrators thrived during Covid-19 because the world needed friendly installers showing up on doorsteps, ready to make remote learning and home entertainment work flawlessly as families sheltered in place.
The world’s needs will continue to evolve, but the need for “local as hell” service isn’t going anywhere. Integrators are constantly iterating and changing with the times as tech innovation moves forward at an ever-accelerating pace, but no matter what your set of answers to this question looks like, killer service should always make its way to the top.
Also by Henry Clifford: 10 Ways to Revitalize Your Business
What can you be paid for?
In the beginning, most CI business owners understand they can be paid for their time and any products they sell to clients. As the company grows, they may choose to add services revenue through security monitoring or 24/7 remote managed services subscriptions. It’s vital to understand not only the revenue side of this question (vanity), but also to hyperfocus on net profit dollars (sanity) left over after everyone is paid. Many first-time business owners fail to accurately account for their own time or mark-up products appropriately. According to many industry benchmarks, a good CI business should have the following mix/margin:
Merchandise: 60 percent of the project with 35 points Gross Profit Margin
Parts: 10 percent of the project with 50-60 points Gross Profit Margin
Service (Labor): 30 percent of the project with 50-60 points Gross Profit Margin
These mix/margin goals should yield a blended selling margin north of 40 points. Think of this like a golf handicap — you’ll have jobs that fall below 40 points and some well above. Ideally a monthly or quarterly lookback yields a solid trend above the goal line.
We’ll always be changing the answers to “What can you be paid for?” in our businesses. Just like the “What does the world need?” responses, “local as hell” service should be at the top of this list as well. Beware the pitfalls of labor. It’s the highest margin, highest cost, and easiest-to-give-away product you have. Consider implementing a means to measure your employee utilization on a weekly basis. It’s a simple ratio of hours worked to hours billed. A good CI business will operate above 70 percent (billing 28 of every 40 hours worked).
Have you found your ikigai yet? It’s not easy. If you see the same answers pop up across the four questions, there’s a good place to jump off. Take a few hours to shut the world out and document your answers. Your employees will thank you.