The younger of my two sons has been persuaded to participate in a charity boxing match next month.
Consequently he has embraced a serious training and nutrition regime to get in shape and is already showing the benefits of multiple gym sessions, no alcohol and a controlled diet. I’m beginning to pity his opponent on the night.
This has led me to reflect that a successful business needs to be lean, responsive and agile if it is to survive the rigours of competitive life. This is the first in a series which I hope will provide the business owner or leader with some insights into how to tune and revitalise the business to enhance organic growth.
There’s a story of a traveller who becomes lost and asks directions from someone he meets on the road. The man looks at him wistfully and says with a curious grin,
“Well now, if I was going there, I wouldn’t be starting from here”.
Being successful in business is fundamentally about getting two things right: strategy and execution. Sure, there are many other elements involved, but if our vision or strategic plan is flawed, we will fail no matter how brilliant the execution; or visa-versa. The unfortunate recent demise of a number of UK high street brand names such as HMV, Blockbuster, Jessops and Comet is illustrative. Each one may have been a superb retailer but were eventually brought down by other players selling the same products, in the same space, but through a completely different strategy.
Developing a sustainable strategy means we need to understand where we are and think about where we want to go. We may think we know our location, but often we need additional data to be certain. Finding the answers to the first question is a start. We can then apply the energy and vision of our leadership team to the second question; where do we want to go?
1. Where are we? (our start point)
- Who are our customers?
- How often do they buy?
- What is our customer retention rate?
- What is the customer sales cycle?
- What kind of conversion rates do I achieve (enquiry/proposal to order)
- Are all my customers equally important? Are some more valuable to me than others?
- What products are popular/unpopular and likely to grow/subside?
- What are the key metrics (or key performance indicators) that create the sales, margin, profitability and return on investment results? Where is profit made?
- How visible are we online?
- What are the trends in our part of the economy?
2. Where do we want to go? (our destination)
- What is our vision or ambition for the business in, say, 3 years’ time? What does success look like?
- What is our value proposition? How will we differentiate ourselves?
- What is the right business model to adopt?
- In which geographic markets will we be present?
- In which market sectors or segments will we be active?
- What products or services will we be selling? Which of these exist today?
- Which routes to market will be available to us?
- What kind of organisation, resources and skills will be required to deliver this?
- Will we be working in partnership with other organisations or individuals?
- What financial results will we expect?
Leaders of mid-sized and smaller businesses sometimes believe that it’s not possible to address these two questions. They do not have the time or resource. There is an element of truth in that sentiment, but it’s really a mindset that reinforces the status quo; the inner voice telling us “we’ve been successful for years, so why change now?”
Over the past six months I’ve been involved as a Growth Accelerator* Coach working with a number of SMEs and Start-ups to guide them through this strategic landscape. It’s been encouraging to see that the results are overwhelmingly positive. So before you let that inner voice distract you, start working on the data to establish your current position. Then make a date with your management team to think about the journey your business will take, so that you can plot a successful future. If you need some help with these questions, you could always give GrowthAccelerator a call.
Part 2: Developing a killer value proposition