Many leaders of companies – especially if they’re the founders – have a never-ending desire to stay ahead. They love the thought of winning, and likewise hate the thought of losing. These are terrific positive leadership qualities and we strongly support them. The problem, however, is leaders often continue to use the strategy that drove their company to its current success but fail to change it as the market changes around them. What is needed is a continuous contemplation of new and different directions to keep the company truly relevant to those it serves.
Just look at the myriad of companies that start strong and then sputter out of control. Why does this happen over and over again? According to the Department of Commerce, only one out of ten businesses make it to year 10, and of those that do only 1 out of ten of those will make it to year 20. These are horrible statistics since the majority of all U.S. businesses are privately held.
There are three common mistakes business owners make, and they can kill any company of any size or success.
QUICK WAY #1: Use flawed assumptions. If you read this blog regularly you know we often talk about the absolute need to “Know” your market, your customers in your market, and what makes them tick. Not knowing is like going into battle with a blinder over your eyes and yet, how many companies have actively researched their market in the past 12 months? Or, how many have formally assessed their organization’s performance management in the last five years? Even with a commanding lead in a given market, it’s only a matter of time before your competition will offer a brilliant alternative to challenge your offering and market position. If you have assumed that your positional strength will always carry you through thick and thin, that’s an assumption we would not recommend banking on.
QUICK WAY #2: Set unrealistic time estimates. A company might have a strong showing in a specific niche market, and might be earning higher than average profit margins, and therefore establish a timetable for a new product using the same metrics. After all, it worked in Market A, why wouldn’t it work in Market B? To gain an upward curve in any market requires a continual expansion of offerings. This demands the customization of production, operations, sales, marketing and the list goes on. Trying to stand up all of these areas at the same pace of the established business could lead to frustrating results if an insufficient timetable is planned and not well funded.
QUICK WAY #3: Test in wide open markets. Testing in micro markets is a long-standing practice of consumer corporations, but seldom practiced by their B2B brethren. Experiment in micro markets using A/B testing with new and innovative selective strategies to see what works best. Don’t spend huge amounts of time, instead make quick changes based on incoming results. Once the new strategy has been tested and refined, you can push the full speed ahead button.
Such discipline creates focus and this leads to business growth. These simple business practices can also build high customer satisfaction leading to high customer attraction and retention.