"The awesome Black Bucket of growth!"
How Lakeland Mountain Guides is making time for strategy
Name: Matt Le Voi
Business: Lakeland Mountain Guides
Location: Lake District
Key takeaways:
How you spend your time and resources will vary with your business’s lifecycle
Keep track of the time you spend on three key areas: red, blue and black
Are you are willing to take a risk to step up to the next stage of growth?
In this recent post, we profiled Matt Le Voi of Lakeland Mountain Guides and heard about his ambition to change the role that he plays in the business. After 10 years of building a successful guiding operation in the Lakes, he’s keen to focus on the next stage of his vision: developing LMG Treks and Expeditions, which offers guided trips to Nepal, Tanzania and Morocco, and also LMG Personal Training, offering tailored, personal training programmes.
In our last conversation he recognised that in order to grow to the next level he needs to decide where to focus his time: to continue to spend the majority of his time guiding and bring others in to handle the management, marketing and admin. Or to take himself out of some of the guiding work and focus on building the business, as well making more time to spend with his young family at weekends.
When we speak again a few months later, Matt acknowledges that he needs to make some big changes to his role and also take some risks with the company’s profitability. To help him think about how he uses his time, and what his role should be, we talked about the concept of ‘Red, Blue and Black’ or ‘The Functionality Framework’: tools that the Adventure Collective came across when we were working as business coaches with the Shirlaws organisation.
What is Red, Blue, Black?
At its simplest, it’s helpful to think about a business’s operations in terms of three ‘buckets’ representing the three areas of functionality within any company:
All businesses, consciously or unconsciously, apportion time and resources to each of these buckets and the proportions will depend on where they are in their business journey. So what goes into each of these buckets?
Broadly speaking:
Red = Non-revenue generating support
This might include HR, administration, legal, accounting, IT, or compliance.
It’s coded red because these activities can be considered a cost in accounting terms, but they are also the life blood of any business.
Blue = Revenue generating activity
This is anything that a business does that will support revenue generation in the next six to 12 months. So this will include marketing, sales and PR, and also the delivery of services to paying clients.
Black = Strategy
Time or resources spent in ‘black’ activity typically won’t generate any revenue for more than 12 months but they are critical to driving long-term growth.
A really useful exercise for any business is to work out how your time and resources are currently split between these three buckets, and how that might need to change. We recommend that, as a starting point, each key individual keeps a time diary recording how they spend their time each day and colour coding it appropriately.
Taking away the safety blanket
Talking to Matt it is clear that, like many businesses in a fairly steady state, LMG’s resources and his time are mostly focused on maximising the Blue (Revenue) supplemented by vital Red (Support). Matt has already outsourced some Red activity to his accountant, so freeing up more of his time to focus on Blue activity, in particular marketing and social media, as well as guiding clients.
Asked for a rough estimate, he says his time is currently split into
· 10% Red
· 80% Blue
· 10% Black
This is pretty typical for a leader of a business in a steady growth phase. But Matt realises that, to achieve his vision of growing a stable of successful adventure businesses, he’s going to need to make some changes to his role, and how LMG is resourced, principally shifting more of his time into Black.
He likens the feelings of this next stage to the ‘removing the safety blanket’ experience he had when he set up the company 10 years ago – the decision to give up a paid job in retail, and focus entirely on LMG: “It gave the business a turbo-boost!”, he says.
And he feels he’s at the same sort of tipping point now, only today the risk (or investment) is going to be taking himself out of the ‘delivery’ or guiding, and outsourcing more of this work to his trusted team, bringing on more guides to lead clients. As he says,
“Do I pay someone to manage the business while I’m out on the hills, or do I do that myself? Ultimately, I can’t outsource the vision. I want to control my destiny and the only way to do that is to have my hands on the steering wheel.”
Using our bucket analogy, Matt realises that his role needs to change so that he focuses much more on the Black strategy development, ideally changing his time allocation to
· 10% Red
· 60% Blue
· 30% Black
This is a very typical balance of resourcing for a fast-growth business and, while he says it may mean a short-term hit to profitability, as his costs will go up with employing more guides to do the client-facing work, he’s making an investment in his long-term growth.
He also intends to refocus where he spends his time in the Blue bucket too, with a more organised and planned approach to what we might call ‘Light Blue’, or marketing. LMG already does a lot of work with corporate groups, which is highly profitable work, so spending more time on generating this kind of business will, he believes, reduce the hit to profitability.
The awesome Black Bucket!
By freeing up more of his time for Black activity, he’s clear where he’ll focus: developing more expedition tours and planning how to market them, as well as planning how to grow the personal fitness business. He says that the challenge will be in the busy summer season when there will be greatest pressure on the Black strategy time he’s carved out for himself, but he’s clearly full of enthusiasm and energy for the change in focus:
“I never work better than when I’m under pressure – I just want to get the Blue stuff done so that I can focus on the awesome Black bucket. And seeing my costs go up, paying others to guide, will just be an incentive to get my vision for the future off the ground!”
We’re really looking forward to checking back in with Matt in a few months time to see how things are progressing!
Key business tips
Track how you and your team are spending your time over a week or a month, and colour code it
Consider how you might need to switch the balance between support, revenue and strategic activity
Take time to consider what impact this is going to have – will there be a short-term impact on cash flow or profitability? What is the potential payoff for long-term growth?
Related links:
https://www.lakelandmountainguides.co.uk/
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