Business Models: What Will You Keep?
The world can be a tough place to make a living, as naturalist Charles Darwin aptly observed. The environment is always changing, and when it does species are faced with two very stark choices: adapt or perish. Of course, the same is true with businesses. A successful business will change with the times to remain relevant, while an unsuccessful one will eventually be consigned to the dustbin of history.
When looking at your business model and deciding what parts of it you need to evolve, you have to be clinical, dispassionate and above all, honest with yourself. It’s not all doom and gloom, of course, and you certainly don’t want to throw the proverbial baby out with the bathwater. If you were doing absolutely everything wrong, you wouldn’t have lasted long enough to even need to change. No, you’re doing some things- probably many things- right.
The key thing you need to do is isolate the things that worked, and more importantly, ask yourself why they worked. Was it simply a brilliant idea? A great follow through? Or did you simply catch a lucky break? What formula led you to success? Often the method that got you those great results is just as valuable as that great idea because a great process can be duplicated to generate other great ideas. The journey is just as meaningful as the destination.
Consider this simple process and results chart:
Good process, good results = I love it when a plan comes together.
Good process, bad results = tough break.
Bad process, good results = you got lucky.
Bad process, bad results = what did you expect?
Concentrating your business around what you do well is also known as leveraging. That strength can serve you well in growing your opportunities and penetrating new markets. Examine how you can build on that strength. If something is working, what can you do to make it better? What type of opportunities will it open up? What type of return can you expect to receive for your efforts? Crunch the numbers and don’t shy away from the results.
It’s also important to future-proof your strength. Otherwise it’s not really an advantage at all. Is your success contingent upon a particular employee or work team? How will you replace them if they leave? Good help can be hard to find. Are you reliant upon a particular market segment? What if that particular segment contracts due to recession or is undercut by a new technology that renders it obsolete? After all, VCR repair services and video stores were once considered great businesses to get into.
Evolution can be tough, especially considering how fast things are changing. There is always an asteroid hurtling towards your particular segment of the market. You have to be fast and nimble, but if you leverage what you do well and set yourself up for continued success, you can be the mammal instead of the dinosaur.