Making Profit: Key attributes to a responsive business

by Russell Cummings | Jun 16, 2015 | Business Tips

One of the many obligations for all enterprises – big, small, not for profit or private is making a profit. And everyone involved in these enterprises know that a policy of maintaining the status quo will not produce quality and sustainable profits, and may eventually result in the firm’s rapid demise. A responsive business is one that grows in direct response to the needs of the market.

Often, “speed to market” is a crucial part of successful business strategies but speed itself is not sufficient – it is responsiveness, or the ability to respond rather than react, that is the goal. So how does an enterprise be responsive and make profit in a rapidly changing VUCA (Volatile, Uncertain, Complex and Ambiguous) environment?

There are many things which support a strategy of responsiveness. Here are 4 key elements of culture and purpose.

1. Seek constant renewal.

A responsive business seeks constant renewal by creating the ability for its people to flex to meet needs as they arise. A business must seek to change and shape its environment especially with the Social Media revolution where products can become unfashionable mere days or weeks from successful launch.

Everyone in a responsive firm must understand that each individual should make a contribution to the overall success of the firm and accept their responsibility in the success. Small businesses are generally best at this, as their systems are less fixed, and decision making is concentrated. Large firms should adapt to a small business psyche if the safety of hierarchy and protection of systems is not too difficult to shift. As Francis Bacon said, “He who will not apply new remedies must expect new evils; for time is the greatest innovator.”

Where a business is aging rather than renewing, its problems are systemic. No amount of creativity and eagerness can make a difference if the reality is systemic stagnation. Trying to force more business through an incapable system is a recipe for disaster.

2. Have vision that motivates.

Create a picture of the future to focus the efforts of the team. For Fred Hollows, an Australian specialist in eye disease, his vision was to stop Australian Aborigines losing their sight to trachoma – a preventable disease. His ability to visualise and communicate that picture has gained world-wide money and support.

Most businesses do not have a vision with lofty humanitarian goals but do have vision of how the business fits into the future. Responsive businesses are clear on what the business is, and will be, and communicates this well to their people, customers and others. For further insights into understanding the purpose of your business – watch Simon Sinek’s TED Talk on “Why?”

3. Start a community.

Seth Godin, in his book “Tribes” promotes the idea of building your business around  a collective of like-minded individuals (The Tribe) to optimise business returns. The central theme for your Tribe is your business purpose and your core values. He defines a tribe as: “a group of people connected to one another, connected to a leader, and connected to an idea”.

4. Develop a culture of dissent.

Developing a culture of dissent encourages people to try something new and to succeed or fail in doing so. Looking at something anew can change a system, product, process or relationship. Leaving it as it is does nothing.  So often, our risk adverse society identifies failure as something which must be avoided. A responsive business says that failure is part of each person’s responsibility.

Where does innovation arise if not from people finding something lacking in the current product, procedure or service? Where people see the failure and look for ways to tap into the idea to produce success for the future, all failures will be seen as a stepping stone to success, not the end of a journey.

Thomas Edison, when asked by a young journalist if it felt like failure when he had to go through 10,000 bulbs to get one that worked, responded: “I didn’t fail.  I just found 10,000 ways that did not work.”

New ideas come from changing the status quo, not keeping it as it is.

In conclusion, no longer is a competitive advantage just differentiation or cost. It must now include speed of response because in a changing market no business can afford to stand still. Strategies supporting agility, flexibility and responsiveness are essential regardless of the external forces on the firm.

Flexibility and responsiveness are driven from the top, and assumed by all in the firm. How leaders will guide and implement these strategies is key.

Is your business responsive enough that it can cope with the changing market and still make profit?

Finding Opportunities When There are None to Find

by Russell Cummings | Apr 30, 2015 | Business Tips

How does one steer a person to their potential and then guide them to see a problem as an opportunity?

It could be said that personal optimism and pessimism are the defining difference, or maybe it’s a result of employment versus ownership role, or maybe it’s the winning mindset or its absence which is crucial. Undoubtedly, each of these will play a part but most likely though it is leadership that is missing.  Not leadership as in the “steering the firm in the right direction” leadership, but leadership as in steering the person to their potential.

The book, The Diamond Cutter by Roach and McNally, provides guidance on how to build oneself into a truly authentic leader – one who will seek to manage himself so that those around him feel his constancy, generosity and personal interest and so they grow to trust him and through his skills transfer will enable him to trust them.

One of the key tactics in the book is to figuratively take on another person’s persona and attempt to see every activity through their eyes and emotions.

Taking on the eyes, ears, goals, family commitments, interests, needs and so on of another takes effort but when this effort is made with intention and ongoing commitment then the relationship between the individuals changes. There is a reduction in space between each other and it becomes almost impossible to act in any way other than to encourage the individual to greater potential.

Achieving potential requires development of resilience which is the ability to bounce back from problems. Thus, problems are integral to personal success and the way the problems are handled influences the individuals approach for the future – the mind becomes open when it is directed to learn from a problem or seek a solution from a mistake, and the effect is not only higher productivity but also a more creative and energising experience for all involved.

When seeking solutions becomes the norm, finding opportunities in the wilderness is no longer difficult.

How does this help a firm to find opportunities where no opportunities exist?  Well, it shows that there is never a situation when there is only a problem or an opportunity.  There is always both – it just depends on which side you look. Granted the opportunities may be outside the resources of the individual or firm, but even here an opportunity arises.

For example, a small business in Perth had a rate of workers’ compensation insurance which was higher than acceptable to the CEO – it was 8% of total wages and so was a drain on cashflow and profits and not adding value to the client.

The opportunity here was to reduce the cost by increasing safety procedures and controls. The result was a reduction in expenditure to 2% of wages but the gain was not limited to direct cost reduction. The better safety resulted in lower lost time, improved staff morale and a better client experience – all of which had a positive impact on profits so the gain was considerably more than the reduction in the cost.

So if you want to develop a firm which can find opportunities where others find none, start by instilling a culture of trust and openness in your firm and then challenge each individual to view all things from the other side. You’ll be surprised what may result.

One Question

by James Atkins, Vantage Strategy & Marketing | Oct 23, 2014 | Business Tips

The one question you need to be able to truly answer…

“Why would someone buy from me and not the person down the road?”

Easy to ask, difficult to answer.

Put another way, are you clear on what makes you special? How would you describe your competitive advantage (CA)?

The reason the answer to this question is so critical is because it should be your starting point.

How can you develop a business strategy, let alone fix on a business model, without a CA that differentiates your business?

Armed with a distinct CA the development of your strategy across marketing, operations, HR and finances should become much clearer. They will have a better chance of working together and building, rather than pulling apart at the seams.

The trouble is that uncovering, or developing, a CA is not an easy process . Those that have been able to invent a product, a feature or a business model that is unique and impossible to copy are few and far between.

From my experience here are a few thought starters to help you on the path:

1. Innovation not invention. Invention is one way to deliver CA but is a high wire act for most. Innovation, however, is attainable. Innovation in how you understand, meet and deliver based on uncovering true customer insights – in way that is unique. Ensuring innovation is a way of doing business and a strategic plank should be core to your business model.

2. Beyond the product. It’s not just about the product…in fact it may well be about everything that surrounds it and is experienced by customers at every touch point. The service journey, your positioning, the niche you serve, may well be where your CA lies. Bendigo Community Banks, for instance, were able to identify a niche that was abandoned by others and developed a unique model that has really hit the mark.

3. Filter. A robust, clear CA will become a filter for what you do and how you do it. If it can’t meet the test of being how you prioritise both big (and small) initiatives then it either isn’t a true CA, or you are not committed to making it so. These are not short term tactical activities – it’s strategic, and key to your success. When I visit Boost Juice it seems me that they have a very clear view of their CA and how it translates into their total brand experience – it’s being used as a filter or guide for what they do every day.

4. Be adaptable, and quick…CA is not static. The pace of change and the ability to imitate and reproduce at lower cost is a global phenomenon. Adaptability therefore must be a core competence. It means staying ahead of competitors and carving out a niche in meeting customer needs better than anyone else. Attempting to live off past glories based on a no longer valid advantage is the path to extinction. Retail is literally littered with such failures the most recent here in Australia being Fletcher Jones. So, are you able to easily let go when you need and move quicker than anyone else?

And finally, for those of you that think you are in a commodity market and competitive advantage is not possible – think again.

There is no such thing as a ‘commodity market’…only ’commodity marketers’. Anyone for bottled water?