If you want to truly stand out in today's marketplace and lead your company to new heights of success, you have to work smarter, not harder. For many leaders and managers, that's easier said than done. Despite their best intentions, they get snarled in the glaring failures that derail business growth and stagnate profits.
To avoid the most-common traps that stifle business growth, you have to be aware of them and know the strategies to combat them. The following list will help you turn these seven failures into successes and enable your company to exceed growth projections.
1) Failure to Anticipate
Most companies react to the changes that are taking place. They react to customers, react to the economy and react to government legislation. Instead of merely reacting, you need to anticipate future changes and plan for them. The fact is, you can anticipate a great deal in your industry. For example, are cell phones of the future going to have a high-definition screen with high-definition video? Most people think so. In the future, will we have better bandwidth for both wireless and wired Internet connections? You'd be hard-pressed to find someone who says "no." In the future, will we have more storage in our computers? Of course!
Apparently, you're certain about quite a few future events. But are you making plans now for how your business will take advantage of these developments? Instead of being a crisis manager and reacting to change, anticipate changes so you can drive growth from the inside out. To do that, you have to spend one hour a week not thinking about the crisis of the moment, but rather thinking about the predictable opportunities that are waiting for you. Make a list of all the things you're completely certain about. Then look at your business strategies in terms of that list. Only then can you be more of an opportunity-management organization.
2) Failure to Communicate
There is a big difference between informing and communicating. Informing is one-way, static and seldom leads to action. Communicating is two-way, dynamic and usually leads to action. Ironically, we have all these fantastic communication-age tools, but we're using them in an information-age way. Realize that the information age is not our friend; it's our enemy in disguise. Ask yourself, "In our organization, are we better at informing than communicating?" For most people, the answer is "yes." And if you can't communicate internally with your staff, how can you communicate externally with customers? This is not to say that you should stop informing people. However, you do need to tap into the true power of communication. When you focus on maximizing two-way communications, you can create a communication-age organization and cause positive change much faster.
3) Failure to Collaborate
The majority of people tend to cooperate, which is different from collaborating. Even though we often use the word "collaborate," we're really just cooperating, which is a lower-level function. Cooperating means, "I won't get in your way and you won't get in mine, and we'll work together when we have to." Such an approach provides results, but certainly not outstanding results.
Collaboration is when we put our heads together and ask ourselves, "How can we create a bigger pie for both of us?" Collaboration is based on abundance. Cooperation is based on scarcity, meaning the pie is only so big, and I want my piece bigger than yours. Collaboration is about working together to create a bigger pie for everyone. That's how you can get competitors to work with you and not against you. Remember that today's technologies allow us to collaborate in new and amazing ways. Make sure you're using them properly.
4) Failure to Innovate
When asked to identify the last time they did something innovative, most companies have to go back five or 10 years to cite something meaningful. Why? Because the majority of companies innovate once, come up with a great product or service, form a company around it, and then they let it ride. They don't continue to innovate and create new products and services. Instead they spend their time asking themselves how they can be more efficient, how they can do more with less, how they can reduce staff and overhead and how they can use technology better. Those are all good questions. However, you also want to ask yourself how you can use technology and your people to create new products and services that will increase the sales of your old products and services. The more time you devote to innovation, the more profitable and efficient you'll ultimately be.
5) Failure to Pre-Solve Problems
Some people say that a problem is an opportunity in disguise. Nonsense. A problem is a problem, but most of the problems our customers and our companies experience are predictable. In today's world of rapid change, if you ask customers what they want and then give it to them, you're missing the real opportunity. Why? Because your competitors are asking the same question, getting the same answer and providing the same solution. Instead, you need to think a level higher and ask yourself and your customers, "What problems are you about to have?" Then you can develop new solutions based on the answers you receive. At that point, you can base your product development on your customers' future problems and deliver the product or service right when the problem is starting to hit.
6) Failure to De-Commoditize
Any product or service can be de-commoditized. Unfortunately, many companies tend to come up with something new, and then that's its main product. Other people copy the product, and it becomes a commodity. Margins get thin. Sales slow down. And they end up competing on price. The key is to take your product and put a service wrapper around it.
Here's an example: In the electricity industry, the utility provider has to ask ratepayers whether they can increase the price. To de-commoditize themselves, one electric company created what they called "digital electricity." They told customers that if you're a company that runs a lot of expensive computerized equipment and you don't want the electricity coming into your office to ever turn off or fluctuate in current or voltage, then you need digital electricity, which will cost more. Many big companies signed up for the more expensive service.
In the near future, homeowners will have an interest because they will have multiple computers streaming audio and video in their home. So this electric utility took a commodity and wrapped a service wrapper around it so it could charge more. Therefore, look at your product or service and think of ways that you can wrap a service around it to add value. But don't stop there. Keep adding value to it every year so you never become a commodity again.
7) Failure to Differentiate
Too many companies become just like everyone else. They don't continue to stand out. Even though they do strategic planning, it's usually just financial planning in disguise. True strategic planning needs to be more than numbers-based; it needs to focus on how you can differentiate from your competition instead of being and doing more of the same. So how do you differentiate? Simple - you stop practicing all the failures of business growth we just discussed. You start anticipating, communicating, collaborating, innovating, pre-solving problems and de-commoditizing. Realize that you can infinitely differentiate your company if you're only bold enough to try. Have the courage to do the things your competition isn't doing.
Jump-start Your Success
Business growth doesn't have to be a mysterious thing. When you know the failures to avoid and the strategies to combat them, you'll be well on your way to creating an organization that continues to grow despite outside conditions. Learn from these failures and rethink the way you do business. It'll pay off for years to come.
