David Davies on How To Bounce Back Stronger in Business
David Davies is Founder of Sovereign Beverage Company Ltd and knows what it takes to face challenges in business and bounce back stronger. They took some time out to share their insights with The Industry Leaders.
Can you start by telling us a bit about your journey as an entrepreneur, focusing particularly on your experiences with setbacks and challenges? How has this shaped your understanding and mastery of resilience in business?
I knew from a very early age I wanted to be an entrepreneur. From the age of six I was working in his father’s business during school holidays, developing my work ethic and learning the logistics industry. I continued this journey throughout school and university, studying business and finance. Having started the business during the 2007 recession challenges are something that I know a lot about. One key challenge that the business faced at the beginning was money - we didn’t have any. We had to make sure that our model was very efficient - we don’t hold products, we sell everything before we buy it, and we get paid before we pay out. In many ways it was a positive thing that we didn’t have money and had to create our own cash flow, as that business model has endured today. Resource was a challenge as well, at launch there was only me on sales and another employee on operations; this limited the product range we were able to offer. To overcome this, we partnered with another brewery in the industry who bottled for smaller breweries, and offered products from several breweries by working with that one larger bottling brewery. This ticked the boxes for our customers in that they had a wider range of products to choose from, but the supply chain was kept simple and consolidated. Starting out this way during a challenging time has given me the confidence to believe that with a bit of planning, flexibility and the ability to change direction I can ensure my business can overcome any obstacles.
In the world of entrepreneurship, failure is often seen as a stepping stone rather than a dead-end. How do you perceive failure, and can you share an instance where a failure led to an unexpected growth or success in your business?
Although not a personal failure the Russia / Ukraine conflict meant that we ceased trading in Russia this action wiped out 15% of forecasted sales off our budgets overnight. I worked with my team to find ways that we could counterbalance and replace the lost business. As a team we did a number of things to combat the effects of the conflict including entering new markets such as adding Kazakhstan. This came through networking, with an industry colleague recommending us to an importer who had previously worked with a Russian importer and needed an alternative.
What strategies have you employed to cultivate a culture of resilience within your organization? How have these strategies made your team more adaptable and innovative, especially during trying times?
I believe that much resilience comes from mindset and so I really encourage the team to have a growth mindset,to embrace challenges and to see failures as learning opportunities.I work hard to help the people in the business to believe in their ability to improve and overcome obstacles. My belief ishaving the right mindset encourages resilience and innovation and the fact that we set our vision and created our values after six weeks into Covid is the best example I can give.
Also I find that encouraging a culture of open communication creates an environment where team members , no matter what their role,feel encouraged and comfortable sharing their thoughts and ideas and the same goes for sharing their concerns.Embracing the fact that everybody in the business as an individual with their own viewpoints, life experiences and knowledge gives people freedom to be innovative and share without the fear of judgement.
As part of thecompany strategy Ipromote collaboration and teamworkas collaboration fosters resilience as it creates confidence and a sense of a collective responsibility in terms of solving a problem as opposed to an individualistic approach.Also key is giving people what they need to grow by equipping people with workshops,mentoring and trainingyou help them to develop new skills, with new skills come confidence and that confidence leads to a growth in resilience.
Inaddition I recognise and celebrate achievements away from just the financial rewards and businesses as I believe it increases motivation, boosts the morale of the teamand reinforces a culture of resilience.I’m also not adverse to encouraging risk taking and experimentation.Experimentation allows forinnovative solutions to emerge which in turn enhances confidence.
Finally I aim to lead by example. As the founder of the business I always try to show resilience in my own behaviour, which for me means there is nothing I expect my team to do that I wouldn’t be willing to do , get involved with or support myself.In my experience this is the best way a leader can motivate a team as actions speak louder than words.
You've spoken about bouncing back from failure, but I'm curious to know if there is a methodology you follow to analyze what went wrong and how to correct it. Could you describe your process for assessing and learning from mistakes?
It can take a lot to bounce back from failure and when it things go wrong I have to dig deep and go back to basics as if you can do the basics well it will stand you in good stead in the long term. What comes with going back to the start is a sense of courage, tenacity and strength of character. From a business point of view when things go wrong you need to go back and look at the objective and what the goal was. Examine why it wasn’t achieved and what was the mistake that was made? There needs to be a process of evaluation and I think this is something that should be done as a team so that you get a collective view on what happened rather than just one person's interpretation of events. After the evaluation, put steps in place to ensure that the same thing doesn’t happen again. The first step in that process is to collect all the relevant information about the mistake or failure, that includes looking at reports, doing a statistical analysis, revisiting what the model is and listening to feedback from team members and relevant external parties, then examine the course of events, what was learned from the situation and put processes in place to make sure it doesn’t happen again. Once the assessment and evaluation has taken place I like to take steps to rectify the issues and also examine other areas of the business where the same or similar thing could happen in the future, so that this can be prevented from happening. Communication is key so I always let everybody in the business know what has happened and how we will prevent it in future as it is important that everybody learns from the situation and whilst I am very anti a blame culture I do think it that If things have gone wrong individuals who may have been involved take ownership of the situation and I include myself in that. As part of people’s development it is important to not only applaud when things go well but also have the ability to acknowledge when things have gone wrong in order to move forward. Finally accept that things aren’t always perfect. I’ve found that on a number of occasions the setbacks and failures have been the things that have defined the next part of the business. Looking back nine times out of ten once the emotion had gone and a solution had been found things weren’t as bad as they first seemed.
Many entrepreneurs fear failure to the point that it paralyzes them. How do you balance taking calculated risks with the fear of failure? What advice would you offer to other entrepreneurs who struggle with this?
That feeling is definitely a common challenge for entrepreneurs and I think that fear grows with your business, I know that for me iIn the beginning I took all sorts of risks as I didn’t have anything to lose but as time has gone on and the business has grown with there is now a team and reputation, this means that risks I take now could have an impact on not only me bit the team and the business as whole..
I still do take risks, I think every person in business does but now I have strategies in place for risk. For a start I now have good people that I trust around me. In the early days it was just me following my gut and making all decisions. Now I have my people and we have sessions where everybody in the leadership team brings their skills and experiences to the table and can use them to contribute their ideas especially when it comes to new business. Some may consider it old fashioned but I still favour using a SWOT analysis to assess risk and I also take time to stress test potential opportunities against the company vision and values. This helps eliminate lots of risks that I might have taken. If something doesn’t align with our values and vision I’m unlikely to do it . I think when businesses don’t go back to what is at their core it can lead to a more shotgun approach to risks which can be a bit hit or miss. I like to also trial things before I invest and build them up and where possible I’d advise other business owners to do the same. This approach enables me to limit the risk of failure on the business as I'm aware that whilst failure is a chance to learn and grow, it can also dampen morale and affect the financial wellbeing of a business . I’d also say don’t be afraid to take the advice of others both internally and externally. I make sure I have people I trust in the business but outside of that I take the advice from advisors and mentors. I’m never looking for somebody to tell me what to do but having people to offer their knowledge and own experiences gives me the chance to reflect and hopefully make the correct decision for the business. I believe that while it is important to take risks it is equally as important to have a contingency plan. So, with any risk I like to have identified what could happen from taking that risk and then have a plan in place which could be a way of getting out of the opportunity or simply a method of changing direction. By following these simple rules I have found I have reduced my fear of failure in turn increased my chances of success.
Sometimes, resilience requires knowing when to pivot or even walk away from an idea. How do you recognize the difference between a challenge that requires persistence and a situation that necessitates a change in direction?
As time has gone on and the business has grown and become more established I have found that there are fewer times when this feeling of having to decide whether to persist or change direction occurs. I’d say that part of this is due to things like having visions and values and a strong leadership team around me mean that I always have those things and people to refer back to when trying to decide what to do, when I am persisting with an opportunity I can check back on those key factors and recognise whether I am heading in the right direction. The business also has a strong model and as time has gone on I’ve recognized that if an opportunity doesn’t work or fit within that model that I am unlikely to pursue it. There are other key things that I would advise other business owners to take into consideration in situations like this such as if you are going ahead with something, you need continual evaluation and to get market feedback on it. Establish do people like it, is it working for them, is it selling? and so on. If your customers are coming back with negative or no feedback then despite the fact you might wish to carry on you should probably take this as a sign that this might be the time to stop or make a change. On that note don’t fear change, change is good. As a business leader it’s important to embrace change, let go of ego and emotion over a project or idea and recognise that there is nothing wrong in saying that didn’t go to plan. Sometimes it's more important to have the strength of character to recognise what’s not going right, own it and change it quickly. Make sure you assess scalability and sustainability of a project. Consider what challenges you might face and whether it has the ability to hinder the chances of scaling the business in the long run. If it could cause problems it might be time to think about changing direction. If it is something more temporary this may not be the case. For example we have had instances where in certain markets there have been political issues and instead of persisting we’ve had to remove ourselves until that particular issue settles down and we can re-enter. So, market intelligence is key for us. While I don’t do all my business like this I do think there is a lot to be said for gut instinct and intuition. Sometimes you can have a lot of reports and detail but something in your gut tells you it’s not the right thing to do and that gut feeling can be a valuable guide. If you can combine instinct with a rational analysis and surrounding yourself with good people you’ll be able to get a balanced view on whether you’re doing the right thing.
The global economic landscape is always changing, and recent years have seen some extraordinary disruptions. How have you adapted your business to overcome unexpected global challenges? What were the key factors in your successful navigation of these waters?
In the past few years with Covid, conflicts and a cost-of-living crisis we have all had a force de majeure after which the opportunity to plan and know a crisis is coming doesn’t seem as foreseeable anymore and I should imagine that’s the same for a lot of businesses . At Sovereign Beverage Company we have been able to survive recent crises as our business model is very lean. We don’t hold stock; we sell before we buy and we get paid before we pay. This means we can scale the business up and down as required. In terms of cash flow, we are fortunate that at the moment we are in a position where we could run the business for a few years without impacting staff levels. Generally, for all businesses I would say that communication is absolutely essential in a crisis and quality communication needs to start internally by coming up with a contingency plan as a team. This plan should include who you need to speak to in terms of suppliers and customers in the event of a crisis and make sure you have deadlines for when that needs to be done . Also move quickly in your communication, there is no point burying your head in the sand and by informing people of the situation promptly you build trust. At Sovereign we have a crisis management team, within that team each member has clear responsibilities and actions that they need to take. As a team when a crisis occurs, we look at and discuss what’s the worst that can happen? When do we think this could happen? Then we work back from that to complete our plan, the whole-time keeping people informed of what is happening. It is easy to panic when things go wrong and cut corners or try to look for the easy route but one of the biggest rules I live by is always do the right thing, maintain your values and do things in the same way as you would if things were going well.
Resilience in the face of failure is often linked to personal growth as well. How have your business experiences shaped you personally? Can you share a moment where your professional resilience translated into a personal transformation?
Whilst I don’t have one specific incident to refer to I do recognise that at the start of my career, when I was a salesperson I didn’t have a clue about managing or dealing with people, I was quite selfish and very financially driven. That way of being got me in some tricky situations with people and during that time I had times where I dealt with people successfully and unsuccessfully, had people let me down and went through hardships but all have that has helped me grow. Those times and learnings have enabled me to reassess myself and look at my values and to create a business where my company and personal values align. This means I have been able to build a business that is based on inclusiveness, transparency, teamwork, going the extra mile, doing the right thing, tenacity and having courage. I wouldn’t have been able to do without those earlier experiences in my career. Your insights on resilience have been incredibly enlightening. For our audience who might want to learn more about you, your business, or perhaps even reach out for mentoring or collaboration, where can they find more information or get in touch with you?