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Published 14 September 2012 08:06, Updated 20 September 2012 04:16
What would you do if you were to start your business again?
What products or services would you keep and which ones would you dump?
What staff members would you develop as part of a stable long-term plan and which ones do you have regrets about employing?
There is no doubt that most business leaders are very – if not entirely – emotional about their businesses. The reason they don’t make any changes is because the survival of the business is not usually dependent on doing things differently.
When I started out, I was very hand-to-mouth and as such had to react and respond quickly to things that were not working as some of them were a question of pure survival.
There was an air of excitement of getting by but an emotion that everything was urgent and an understanding of what needed to happen to get past that early incubator stage.
One of our very successful clients said to me just recently that if he continued to do business with the same veracity and vigour with which he started, then his business today would be five times the size.
His comments were similar to a lot of business leaders, where they had found their comfort zone. To understand this better, the definition of comfort is a physically relaxed state, without any pain or other unpleasant feelings.
Generally, the bigger the company the more tolerable imperfections are in the business. If the overall picture is going well, most leaders won’t risk alteration or the consequences of change as performance can generally be seen as acceptable or “comfortable”.
But there are those leaders that “sweat the small stuff” and have a distinct lack of tolerance towards mediocrity in any facet of their business, so they regularly make changes.
This is not to say that mass change is essential in every business model, however there is a need for constantly keeping yourself out of your comfort zone because comfort today may mean substantial loss tomorrow.
I often look back on well-known businesses that have collapsed; businesses that were household names and where the owners seemed to enjoy fantastic success and prosperity.
The key question is for leaders, how far back after failing would they need to have gone to have changed their ways or made alternations to the way their business was being managed.
By this I mean, if they collapsed in 2009, what would they have done in 2006 to avoid failure? Would they have contained overheads? Would they have worked on improving margins, even if it did come at the cost of reducing size and turnover?
Would they have reviewed their key people more carefully or perhaps even said no more often, when unsubstantiated ideas came across their desk?
No doubt this measurement is a balancing act between the veracity and vigour mentioned earlier of attacking opportunity against being consciously aware of risk and making the right moves to ensure survival.
For me, it has a lot to do with the lifecycle of the business, where the leader is positioned in terms of both their own needs and that of other stakeholders.
So change is in fact a necessity in every business. It is everywhere around and it is never ceasing. Key decision analysis has got to be at the forefront, particularly right now in a somewhat challenging world and local economy.
Just last week when I was laying out my business growth plans to my advisory board, I was stopped halfway through by one of the members (who is an ex-CEO of one of the world’s best airlines), who reminded me about finding that “sweet spot”; the place where the business is operating most efficiently with the least amount of risk and an orientation towards long-term sustainability.
So while change is essential, the amount of change required may not be that much and the “sweet spot” could be very close indeed.
MORE SMART TALK:
Coming up: Freelancer.com founder Matt Barrie