Most businesses go through a life cycle, but must growth inevitably be followed by maturity, decline, or even failure, or can businesses escape the limits of mortality?
At a time when so many SMEs in South Africa are facing severe threats from multi-national rivals – when managers and society at large are all concerned that yesterday’s engines of social responsibility and wealth creation are becoming redundant – the challenge is to find new paths to sustainable growth through above-average performance, introducing new products and processes, up skilling employees, and creating new markets.
Embracing change for growth
Dynamic businesses resolve the dilemma of looming redundancy and probable liquidation by rejuvenating value combinations: Variety and efficiency; quality and productivity; and speed and flexibility.
Managers must rethink their preconceived notions of what determines business success and how value is created before re-building hard-won competitive advantages.
In much the same way that one’s car performs more efficiently if it’s regularly serviced and checked out, so businesses can benefit from equivalent attention to ensure they continue to be ‘roadworthy’ and perform at a high level.
However, some managers do little to improve the mechanics of the business because they are oblivious of the fact that they need to. They solider on in blissful ignorance believing that their leadership style is good enough to keep the ball rolling.
The problem is that until companies systematically monitor how they are perceived by their customers, personnel, suppliers and industry counterparts, and get proper feedback they can act upon, they are quite literally operating in the dark and likely heading for bankruptcy.
When it comes to introducing change, many managers appear to possess an ‘anti-body’ that operates to maintain the status quo; the more radical the change, the more resistant management becomes.
Clearly, there has to be some sort of viable investment pay-off in the process of change if organisational inertia is to be overcome.
Here are four ways to stay ahead of the game.
1. Revise your business plan annually.
Keeping your business plan up-to-date forces you to step back to make sure the big picture still makes sense.
The development of technology has changed the way we conduct business, and will continue to demand that firms adapt to the ever-present shift towards new innovation.
Spend time updating your original strategies with current information.
Your goals may need to be sharpened, your marketing or funding needs may have changed, or you may find that the business’ competitive edge will greatly benefit from new technologies being brought into the current environment.
2. Audit your marketing mix.
The Marketing Mix is a central element of marketing strategy. The standard marketing mix should consist of 21 marketing divisions:
- Product, Price,
- Personal Interests,
- Practical market experience,
- Physical Evidence,
- Personal (social) Networks,
- Public Commentary,
- Search Engine Optimization,
- Customer Service
- and Direct Marketing.
3. Refine your lean Management production practices.
The aim of lean management should be to cut out waste, speed up production, and adopt improved flexibility to guide employees to continuously improve their ability to meet expectations of high quality, cost-effective production practices and on-time delivery.
Lean management affects the company culture, encourages open communication, and promotes seamless adaptation for day-to-day procedures.
Instead of pondering about problems or designing strategic plans in the boardroom, management should encourage employees to share and contribute ideas, and try out new techniques to find practical and effective ways to improve productivity.
Continuous improvement is achieved by breaking down complex projects into smaller solvable components, thus making tasks easily executable.
4. Upgrade workforce skills in job-rotation schemes.
Job-rotation not only ensures that high levels of productivity is maintained in the event of absenteeism, resignations or promotions, but also fills the skills gap by furthering employees’ vocational knowledge and expertise.
Adequate time should be scheduled to thoroughly prepare replacement workers in advance of taking up a position.
Such schemes are often viewed as having the virtue of both meeting the training needs of firms and providing job skills to unskilled or unemployed persons.
How You Can Over-Deliver To Gain The Advantage
Go over and above for the people you serve, and you will enjoy the benefits of an abundant relationship.
Wise, established entrepreneurs know that over-delivering value — which simply means going above and beyond for the people we serve to deliver more satisfaction for our service and thus exceed expectations — is crucial to a business’s survival, growth and future. It represents the core of a company’s foundation. And without a solid foundation, a business is always vulnerable to a person or company that does over-deliver.
To ensure you don’t ever forget the importance of over-delivering value, here are three ways it will give you and your company a distinct competitive advantage:
1. Creates abundance
Success comes most to those who are surrounded by people who want their success to continue. When you over-deliver value, people may be sceptical at first, thinking that you are expecting something in return, but when you are consistent and genuine with your intentions, they begin to trust and appreciate that you are just thinking of them.
You never know the value of the value you are delivering. But I’ve learnt that if you are consistently delivering greater value to people, your value becomes more and more aligned with the immediate needs of the people and companies you are serving — and abundance in the relationship is created. This is what over-delivering value is all about.
2. Earns respect
Entrepreneurs who take the time to over-deliver value are the ones who earn respect. Typically early-stage entrepreneurs tend to find ways to be the recipient of someone else’s value in a search for momentum.
You never know which transactional seed is going to grow, but when adding value to others, this type of seed is never forgotten.
For example, every quarter, I deliver a white paper to clients with the intention to challenge their thinking. My goal is for them to know that regardless of whether I am conducting business with them or not, I am thinking of them and thus strengthening our long-term relationship. And since my white papers focus on predicting future leadership trends and business strategies, when a related topic arises in one of their strategy meetings, they don’t hesitate to call me to discuss an opportunity for us to engage.
3. Enables distinction
Entrepreneurs who add value to others create and sustain a distinction in the minds and hearts of those they are serving. After all, most people are simply doing what they’re told to do inside the box they are given. Entrepreneurs can’t afford to do that.
We are the originators, the innovators and the opportunity seekers. We live our lives constantly in search of ways to add value to make things better. We disrupt the status quo. We are not in the business of fixing the old ways of doing things. We create new ways of doing things. If entrepreneurs are technically the experts at adding value through our products, services and brands, why can’t we add value through the people we depend upon most for our success?
Over-delivering value is the key not only to being a successful entrepreneur but also to the entrepreneurial mindset we must continually cultivate in ourselves and others. No one is successful alone. We must see the value in over-delivering value by being other-directed and connecting dots of opportunity with focus and purpose to become smarter and wiser, while making ourselves invaluable to the people and businesses we serve.
How Netflix Is Now Disrupting The Film Industry By Embracing Short-Term Chaos
One wrong move and Netflix could have been nothing more than a footnote in the history of entertainment. But by staying ahead of the curve and embracing disruption, the company is threatening some very entrenched competitors.
Attendees of the annual Cannes Film Festival are typically not afraid to be vocal in their dislike of a new film — booing and hissing are both surprisingly common — but the recent film Okja possibly set some sort of record. The crowd was booing and jeering before the film had even properly begun. In fact, all it took was the name of the studio behind the film: Netflix.
Why the animosity? Netflix is disrupting the film industry, and the traditionalists aren’t happy. After debuting at Cannes, Okja wasn’t released in cinemas. No, instead it was released right to Netflix, free to stream as long as you have an account.
Of course, few would have guessed a few years ago that Netflix would ever get into the business of making its own television shows and movies. According to industry lore, entrepreneur Reed Hastings launched Netflix because he was annoyed with the exorbitant late fees of video/DVD store Blockbuster.
Instead of having to return a movie once you’ve watched it, he conceived of a business that would ship DVDs right to your door through the mail.
It was a clever idea, but not one that seemed terribly disruptive. The whole process could be a bit of a hassle, and it required you to schedule your entertainment well ahead of time. Blockbuster even had a chance to buy Netflix, but decided that it wasn’t worth it.
The rise of streaming
Even as Netflix was hitting its stride in the early-2000s, the tide was already turning. It was becoming increasingly clear that the Internet was going to be an incredibly disruptive force, but many companies failed to notice. Or, if they did notice, they failed to take adequate action.
By 2007, the potential of streaming TV shows, films, music and books online was clear, but the DVD business was still doing well. However, Netflix decided to prepare for the future (and disrupt its own operations) by launching a streaming service. It did this by going to the traditional movie studios and television networks, and asking to licence their old content.
In the view of these studios and networks, old pieces of entertainment had run their course, so they were pleased with the new revenue stream.
This brings us back to Okja. Netflix has been creating its own content for the last few years because it realised that studios and networks would eventually catch on. At some point, they would understand that they were giving Netflix the ammunition needed to disrupt the industry. Why have Netflix stream your content if you could create your own streaming service?
“The goal is to become HBO faster than HBO can become us,” Hastings said of one of the most popular American cable channels back in 2013.
In a mere 20 years, Netflix has gone from a low-tech operation that sends DVDs through the mail to one that not only streams content online, but is also producing its own content — content from some of the most respected actors, producers and directors in the world. All of this is costing Netflix hundreds of millions of dollars, and it remains to be seen if this strategy will ultimately pay off, but betting against Netflix is risky.
Netflix has shown itself to be uniquely capable in drastically shifting its business model. Here is how Hastings explains it: “Short-term optimisation about being efficient is the death of long-term success and innovation. Building Netflix, we created a company that tolerated some short-term chaos, and we manage right at the edge of chaos. The value of that is keeping and stimulating the amazing thinkers, so when the market shifts, like DVD to streaming, or licence to original content, we have in Netflix all kinds of original thinkers, and that is the long-term optimisation that all of us in organisations want.”
SME Leaders: How You Can Manage Growth
Fresh growth is all around us this Spring – find out how you can powerfully manage growth as you provide leadership to your SME.
In the transition from start-up to scale-up, a critical factor for a growing business is the quality and strength of its leadership team.
Learning to trust and empower staff is a crucial step for SME leaders who wants to grow their business upwards.
As a business grows, one of the biggest challenges for the business founder and leader is the hand-over of an idea from the founder to the people who work there, The brand moves from being one person’s idea to being the professional focus of a whole group of people.
Without effective leadership, small businesses will be held back, more than three-quarters of SMEs provide no leadership development for their staff. What does this mean for you?
If you lead your business with vision and clarity, you set yourself apart from your competition. Here’s how.
Lead the pack
A growing business creates more work than a leader can handle alone.
As the team grows, founders often react by micromanaging the details of their business. In trying to take on everyone else’s job, the founder often leaves the most critical position vacant: strategist and vision-setting.
Learn to trust and empower others in the organisation and you will find you have room to innovate, which is critical for business growth.
Steady the ship
An effective leader will also engage others in the business to embrace and adapt to change as growth continues.
- Vision: First, plot the course for where the business should go in the short term, and the long term.
- Change: Understand what needs to be put in place to grow the business. You might need to source better business operating systems to streamline this growth, or change a few internal business processes, or rethink how you calculate your hourly rates.
- People: Growth equals change, and change equals pain, so if you want growth, budget for pain. Understand that you will need to guide and coach the staff into changing their mindset and adapting to these growth changes.
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