Are you deceiving yourself about your business?

by Kate on September 26, 2012

What can we learn from observing another established brand collapse into insolvency? There is no reason to expect a business to last for ever, but could it?

The Emperor’s New Clothes is a story by Hans Anderson. It tells of a vain Emperor who is sold an invisible suit of clothes. Told that the fabric is invisible to the ‘hopelessly stupid’, he pretends he can see the suit – even though he can’t. It turns out to be a con job. There is no suit. But even after being alerted to this fact by a boy too young to buy into the story, the Emperor continues in a procession, displaying his foolishness (and much more!) to many.

Despite apparent evidence of a problem, many in business continue along, applying the same practices as they believe worked in the past and hoping the tide will turn. Like the Emperor, they are often so convicted of their rightness that they are blind to the signs of a problem.

Who can blame them? As one swallow doesn’t make a summer, one bad result doesn’t prove a business model is broken. But the longer we search for evidence that all is well, the harder to turn course.

For leaders, their advisers and managers, there some things to look at:

  • In tough times we might see a problem, but fail to grasp that the solutions of the past no longer work. Look deeper when the actions that are supposed to fix the problem don’t, or when people tell you they are doing all they can to apply the old rules.
  • Do you hear the voice of the outsider, the new staff member who asks “why do we do it that way?”, the lone voice? Do you routinely look outside your industry and close network and consider new ideas?
  • Are you making innovation part of doing business? Your product and your buyers’ tastes have a lifecycle and one day you won’t be flavour of the month anymore. If you leave it till the problem is obvious, you may not be able to recover. This is especially important in the franchise sector. The product that’s ‘hot’ today is rather unlikely to continue that way indefinitely, and implementing change in franchises isn’t always an overnight thing!

That a business has been successful in the past doesn’t provide a guarantee it will be in the future, or that the things that made it a success then will continue to work. We have plenty of evidence for that. Asking tough questions of yourself and others, and innovating, may help you avoid becoming an insolvency statistic.

What are you prepared to open your eyes to?

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Where is your business broken?
October 4, 2012 at 6:47 am

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