New Year, New Week – New start?

Here we are in January 2021 and it is NOT the time to be “waiting, coping and surviving”.

That would be the path to certain failure.

On Monday at 12.00 midday I will be presenting the last in the Garage Series of Facebook Lives looking at the opportunities and challenges ahead in this New Year and helping you navigate an action path for growth. Join me on my Facebook Page here at 12.00 Midday.

The difficult economic times that we have been in for a while now will not be over quickly. More to the point, most companies will focus their attention on coping, waiting and “just surviving” until well into the recovery. The recovery will come.

There is a lot of competition out there and businesses with heavy debt will not survive – not in the same hands at any rate.

Yet there will be a few who use these times to gain a sustainable competitive advantage and be the leaders in their markets for decades to come.

How can you make sure that you are one of the few?

Businesses struggle NOT for a lack of talent, or a lack of potential, but for a lack of discipline and structure to do the hard things they know they need to do. The problem is they don’t know how to do them.

“A talent for following the ways of yesterday is not sufficient to improve the world of today”
King Wu-Ling 307BC

The normal rate of trade has slowed down over the past year for most businesses. This means that customers will value money more and they won’t make purchase decisions quickly.

And those businesses that have played to too close to the edge, those without reserves are being exposed.

“When the tide goes out you see very quickly the people who aren’t wearing any clothes”
Warren Buffett.

The courageous businesses are the ones who are ready to admit that they are swimming without their swimming costume and seek to change and become a serious business builder.

The point is that if you can survive without debt or do well enough to pay your debts, you will then be faced with a unique opportunity. 

Because all of the furlough schemes and bounce back loans are covering up the fact that we are currently in a period of low productivity, this compounded by a failure to learn and develop, businesses are not using this time wisely. They are not trying to work out how they can become better stronger and fitter businesses. They are waiting because the debt has given them a cushion.

The advantage for those businesses that realize that the “secret” of future competitive advantage is knowledge, is that it’s cheap –  compared to new capital goods, machinery and land. 

Learning new knowledge and spreading it through an organisation is extraordinarily cheap. What it takes is thinking, being smart, applying oneself and buying what is the cheapest capital goods of all at this stage – knowledge.

Creating that knowledge starts by having an honest conversation about how your business is operating at the moment, why it is not performing at the level you want and then building a plan to make it happen.

Here is the problem…growing and scaling a business is a long game. If you want long term gain there will always be short term costs. The overriding argument is, however, to buy into the myth that if you spend a little bit then you will be able to get some return and then work out what to do next.

The little bit of investment, however, gets you nowhere so you spend a little more, again and again. 

Like a frog in slowly boiling water, you realise too late that you are in terrible trouble and it is game over.

The shiny baubles that promise long term gains without some short term costs head you into what is likely to be unrealistic opportunities designed to separate you from your money.

Any decent work to help you improve the potential for your business to grow and scale will typically require some short term capital. The less capital required the higher potential risk of repetitive short term losses.

To quote a very successful US business owner…

“The people who want to grow but don’t want to risk $2000 or $12,000 to acquire the knowledge, skills, staying power and ability to implement, are doing themselves and their employees a disservice”

Right now your business needs to be the low-cost reliable producer, the preferred supplier for your product, service or experience. The basic service features of on-time delivery, keeping your promises, speed (which allows your customers to use minimum cash), meeting or exceeding quality and reliability standards are what matter during extreme competitive times.

Make no mistake, though, we are in a competitive battle like none other. 

And the source of advantage is not to cut costs, people or corners. The source of advantage is what it always is in the real world. 

The source of advantage is discovering what makes a difference, what knowledge has the greatest leverage that when applied, will increase productivity without capital. Those that are going to win will look at systems, personal productivity, coordination within their operations (and with suppliers), speed of production, and communication to dramatically increase both productivity and service.

Many of these will be against the culture, against the past, against the popular opinion. And they will energize and focus the people who are going to produce the future. 

I am not talking about squeezing out the last drop because times are tough. I am talking about a transformation of the way people work and are managed so that knowledge and accumulated skill are spread throughout your business and operate in coordination. (The fastest-growing companies in the world today are doing little more than this.) 

AND THE POINT IS: The specific advantage will be sustainable and not merely a temporary adjustment to the circumstances. It won’t just be a fix for the current crisis, it will create a sustainable competitive advantage for many years to come.

But…

To make these changes will be difficult because the changes require us to sacrifice behaviours that have worked in the past but are no longer relevant.  We will have to become the leaders we currently are not, and put ourselves in uncomfortable positions and give up the safety of our habits and beliefs about people – and ask them to do the same.

The people who will flourish in the coming difficult economic times and in the coming era of intense competition will be those who learn to think, who learn to learn, who learn to educate so that the knowledge of their business becomes shared and applied widely in their organisation.

It will be those who courageously engage the hearts and minds of all their employees.

“To sacrifice what we are for what we could become is the challenge.”
Rene Dubois 

AND THE POINT IS: The arrogance, ego and unwillingness to take on board new thinking and behaviour will prevent most from taking the lead in exploiting the least expensive source of growth available in history. 

If you think you are ready to set a new path for your business then take a small step. Book a Performance Strategy call with me here so that together we can identify new possibilities for growth and scale in your business.  I charge £97 for a one hour call, this is to dissuade those who have not yet decided that change is necessary.  If at the end of the call you wish to do more work with me, the fee is credited against future costs.