Hope is Not a Viable Strategy


Hope is Not a Viable Strategy

Many businesses follow a fairly regular rhythm; people show up for work, activities are accomplished, sales are generated and customers are serviced. Few businesses actually understand the economic or operational drivers of this rhythm— but when things go as planned, there’s no compelling need to ask questions.
 

Business is a bit like the weather. When yesterday was bright and shiny and today is even better, there’s no need to ask questions.

 

This model works fine until something happens—there is an economic shift; a new competitor arrives on the scene; disruptive technologies change the way customers use your offerings. When these changes occur, the rhythm breaks, and lacking any true insights into the economic or operational drivers of the business, many firms end up flying blind.
 

Unfortunately, this happens all the time; just a short while ago, we were working with a client whose revenue had fallen by 50% over two years.

 

At the beginning of 2014, this business’ annualized revenues were about half what they were at the beginning of 2012.
 

Over the past two years, this isn’t all that common, and while it’s easy to look back over a two-year period and see the obvious, when dealing with change in real-time, it can be difficult to see the pattern.
 

In the beginning, sales slip a bit, and the drop-off is attributed to some fluke or seasonality. After two or three quarters of decline, the business realizes that something has changed, and a combination of fear and anger set in. About six to nine months into this decline, many businesses attempt to grow or cut their way out of the hole into which they are sinking.
 

Sadly, most of the efforts in these categories deal with optimizing yesterday’s way of doing business as opposed to inventing new ways to grow.
 

When these actions fail—and they often do—many businesses quickly move through periods of sadness and acceptance; sadness that the business has declined and “nothing can be done about it,” and acceptance that this is the “new normal”.
 

The “new normal” does, in fact exist; it’s an economy where start-up companies we’ve never heard of can be purchased for billions of dollars, and where large companies in foreign lands can easily compete with small business that never see them coming.
 

We are entering a time where the rules are changing every day; that change brings challenges and opportunities.

 

In the following weeks, here at the Kabardian Group, we are getting ready to launch a new offering that deals exactly with the issues above and helps our clients to navigate the challenges and seize opportunities to grow and prosper.
 

Stay tuned.
 

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