We hear it all the time. On TV. In the papers.
And we can feel it in our businesses. We might not always recognise it, but we can feel something that is different. Changing.
It is neither a good nor a bad thing. It is a part of the natural cycle of business. Despite what some of the scaremongers say in the news.
However, many businesses are faltering and some are failing altogether. On the other hand, many are also prospering.
So what is it that separates those that fail from those that prosper?
If there is one over-riding factor it has to be adaptability. A willingness to change your business model or your customer base or your product line up or your team to adapt to the prevailing conditions and prepare for new horizons.
Just like the captain of a ship trimming the sales in a storm, the business owner has to set their sails and modify their course according to the prevailing business weather (not the economic climate) in order to make progress.
Those that falter and fail do so for a number of reasons:
- They were in the wrong vessel in the first place.
- They push through the storm too aggressively ignoring the conditions and end up losing their mast to a crashing wave.
- They batten down the hatches and ride out the storm without sail and no-one manning the rudder – they drift passively on the waves and tides until they hit an unseen reef.
I’ve met all three recently.
The first, an entrepreneur in the wrong business, was heart-breaking. The business had been a good business but it just isn’t suited to the current market or even its current premises, owner and customers. The owner has a great deal of pride in what they had achieved (in the past) and their resilience in the face of the changing market place. This is stopping him from making the decision to find a different ship. He needs to find a different way of doing business in that sector before he runs out of the money required to make it happen. In the end, tragically, the decision will be made for him, and he’ll lose the business he has so proudly run for many years.
The second has recognised that the market has changed and has asked for help to identify new target markets and new ways of reaching them. He has ambitious plans and he has shrewdly observed that as long as he is charting his course with careful measurements (key drivers of his profitability, productivity and cashflow) then he can react quickly moving generally in the right direction towards his chosen destination and avoiding reefs and sandbanks.
The third business owner faces having to make half his team redundant if “things don’t change soon”. Unfortunately, we can’t rely on things changing soon. This particular business owner, running a second generation family business, has recognised that his current target market no longer holds the same profitability for him. He also recognised that there may be opportunities to find other markets, but he was too busy over-servicing his current C- and D-grade clients and dealing with the consequences to spend time finding new A-grade clients. He was locked onto his current course. All his attention was on maintaining that course despite the shift in his industry. And so he had no attention left to change direction even slightly.
Now, this is a shrewd and intelligent person, who has run a successful business for many years. And, unfortunately, that past success is acting as a heavy anchor stopping him from leaving his comfort zone to succeed again.
He has been sensible and created a reserve which may see him survive the current situation for as long as it takes for relative prosperity to return to his industry. But it would be a shame for all his reserves to be used up just to survive when a few simple course corrections would lead to revival and growth.
You can’t ignore the changes in the global economy. But you can decide what to do about it. Or you can push on regardless and hope you don’t come to a sticky end.
The key to success in the changing business environment is to adapt. This may seem obvious. But adaptation takes many forms and adapting in the most effective way is not always so obvious.
- careful analysis of strengths and weaknesses
- careful monitoring of your course: how well is your new marketing working
- measuring and honing your sales performance
- making course corrections if your heading off target
- keeping track of your financial health
- monitoring your competitors, customers, team and suppliers
- careful development of systems that are robust to changes in your business, but not rigid.
As the owner of a business, how many hours are you spending on this stuff?
To finish with the sailing theme, ships are safest in harbour but that’s not what they are built for…decide on your destination and set sail..