Is It Time To Get Out Of Your Current Business?

We know that a number of businesses will not make it but a number will be asking themselves the following questions:

What’s next?

What’s the cure?

What can we do to stay to keep our heads above water?

For many, the initial knee-jerk reaction is not actually a reaction at all. The temptation is to hold on to the past as much as possible and pray that the storm blows over.

Are you or fellow board members saying any of the following?

“We just need to wait for the market to recover, and then it is business as usual!”

“The trouble is a blip, let’s just wait and see.”

“It is too risky to act on incomplete information. Let’s allow things develop — we can always take action later.”

This desire to hold on to the past, to endure whatever the harsh environment has to offer, is well known to social scientists.

Summarising a 2010 study, Social Psychologist Dr. Heidi Grant Halvorson wrote:

“People who saw a painting described as having been painted in 1905 found it far more pleasing to look at than people who saw the same painting described as created in 2005.

Students preferred the course requirement described as the status quo over a new version (regardless of whether the new version meant more or less coursework).

People who were told that acupuncture had been in existence for 2,000 years expressed more favorable attitudes toward it than those who were told it existed for 250 years.

Study participants were given a piece of European chocolate. It was described to them as having first been sold in its region either 73 years ago or 3 years ago. Guess which group rated the chocolate as better-tasting…”

As far as organisational change is concerned, there are three primary emotions at play. These are cynicism, fear, and acceptance. Two of these are negative and one positive. Surveys following organisational change put the negative emotions top of the list. Positive emotions are nowhere to be seen.

So it would seem that we have an inbuilt desire for things to stick around as long as possible and avoid change because of the negative emotions that it conjures up.

We all want to last, continue and get back to “business as usual.” We want to hold on to the world just the way it is.

This is exactly where the problem lies and why so many of our transformation efforts fail. It is the desire to stick with the status quo that kills our businesses.

Whyis this? As with life in the natural world, sustainability is not a driver for survival. But change is!

Every day, things change. We breathe in and out, becoming a different person with every molecule of oxygen that enters our bloodstream (it is said that every day you are guaranteed to inhale at least one of the molecules of air that passed through Genghis Khan’s lungs!).

The seasons and weather change, crops grow.

We survive the ups and downs of the stock exchange and commodity markets. Nothing is constant. Change is unrelenting. So if hanging on is not the best strategy for our businesses, what can we do?

The secret lies in working out what our business is exactly. You might produce cardboard boxes on a production line but is your business one of production or packaging? You need to distill the essence of your business idea (maybe focus on the packaging) and throw away everything else.

If you get this right then you can reinvent your business over and over again according to changes in markets, customer buying habits, etc. Our fictitious box making company could become experts in sustainable (or recyclable) packaging solutions for the automotive sector.

Focus on knowledge and core skills as well as what product or service you actually provide.

Instead of desperately trying to stay in your current business by all means possible, it is time for you to get out of the business and get into a new one!

How Innovative And Flexible Is Your Business?

Innovation and Flexibility: Keys to Thriving in Business

Innovation isn’t just a buzzword; it’s a vital type of change that keeps businesses alive and thriving. It can be complex and sometimes hard to fully grasp, but at its core, innovation is all about change.

This change can happen at lightning speed or slowly unfold over time. The key is that managing change is a skill you can learn, develop, and practice. The tricky part? We often get thrown into change without much practice. Imagine being asked to improvise a comedy set at a club without any rehearsal—that’s what it can feel like when we’re asked to innovate on the spot in our jobs. We crave stability, yet we’re constantly pushed to adapt and innovate, often without the chance to fully implement the changes we’ve already made.

One common mistake is setting up an innovation program that changes too quickly. This can leave staff feeling confused, sponsors dissatisfied, and management frustrated with hastily drawn-up Key Performance Indicators (KPIs).

Many Companies Assume Low Volatility In Financial Matters

Even in a changing business environment, many companies assume low volatility, especially in financial matters. Budgeting, for example, is typically done once a year with minor adjustments along the way. But how often do we re-examine the inputs to our budget? Not often enough.

When volatility hits—like a sudden spike in fuel prices due to events in the Middle East—how quickly can you adapt your finances? Do you have a plan in place, or would it spell disaster for your business? Some companies use scenario planning or ‘What if?’ statements to prepare for such situations. But these plans often fall short when the unexpected happens.

To truly embrace innovation and flexibility, businesses need to create systems that automatically react to their surroundings, much like a chameleon changes color. For ideas on how to achieve this, check out our posts “No More Change Programs – Meet The Super Chameleon” and “Innovation Constipation – Are You Suffering?”.

So, how can you cultivate innovation and flexibility in your business? If you’re starting fresh, you have the advantage of building these qualities into your business from the ground up. This might raise some eyebrows from investors looking for a clear Return On Investment (ROI), but the long-term benefits can be substantial.

For established businesses, structural and cultural changes are necessary to foster innovation and flexibility. Companies that have mastered this make it look easy, but it takes time and effort. Think of it like learning to ride a bicycle—once you get the hang of it, it becomes second nature.

Practical Steps to Foster Innovation and Flexibility

Create a Culture of Continuous Learning: Encourage your team to keep learning and exploring new ideas. This could be through workshops, courses, or even regular brainstorming sessions. The more your team learns, the more innovative they can be.
Empower Your Employees: Give your team the autonomy to experiment and make decisions. When employees feel empowered, they are more likely to come up with innovative solutions.
Embrace Failure: Innovation involves taking risks, and not all ideas will work out. Create an environment where failure is seen as a learning opportunity rather than a setback. This encourages your team to take bold steps without the fear of repercussions.
Flexible Processes: Implement flexible processes that can adapt quickly to change. This might involve using agile project management techniques or having a contingency plan for different scenarios.
Leverage Technology: Use technology to stay ahead of the curve. This could be anything from using data analytics to make informed decisions to adopting new software that improves efficiency.
Collaborate: Foster a collaborative environment where different departments work together towards common goals. Collaboration can spark creativity and lead to innovative solutions that might not emerge in isolation.
Customer Feedback: Regularly seek feedback from your customers. They can provide valuable insights that can drive innovation. Understanding their needs and preferences can help you adapt and stay relevant in the market.

Your Homework

Assess your company’s approach to change: How does your company currently manage change and encourage innovation?
Identify strengths and weaknesses: What aspects of your current processes work well, and what could be improved?
Plan for improvement: Consider what changes you can implement to better cultivate innovation and flexibility in your organization.

Reflecting on these questions can help you identify areas for growth and set you on the path to becoming a more innovative and flexible organization. Embracing these principles can help your business not just survive but thrive, no matter what challenges come your way. If you want to learn more or see some case studies, don’t hesitate to get in touch.

Innovation and flexibility are not just about survival—they’re about thriving in an ever-changing business landscape. Let’s embrace change and make it work for us!

Weirdos And Mavericks In Whitehall?

Much has been made in the press of Dominic Cummings and his desire to appoint ‘weirdos’ to all parts of the Civil Service. I have a couple of articles written a while ago about being a rebel and also appointing them. If you are interested read Harnessing The Power Of Rebels and Become A Rebel And Boost Your Career.

Dominic Cummings ‘vision will never happen for a number of reasons.

First of all Whitehall moves more slowly than an oil tanker, and to force it to do so would not just dismantle the machinery that keeps the UK running, it would put a giant bomb underneath it.

Secondly, and more importantly, creativity cannot be left to work on its own, unless of course, you live in a commune. All creative environments have very carefully crafted ‘containers’ to nurture the creativity and also extract the output of the creative processes. In an organisation this can be hard, but in Whitehall?

Finally, what is his strategy for doing this? Will he have a large sports hall full of weirdos all throwing in their ideas or will he replace many of the people in the Whitehall machinery with his alternative thinking recruits? Too many weirdos and he risks replacing one ‘establishment’ with another.

True creativity comes from a tension (think straight vs funny in comedy) and making use of that requires people with a true understanding of the problem, not just a love of sound bites.

I cannot deny that Whitehall does deserve a bit of a shakeup but there needs to be an end goal. Whitehall is a machine that does things (like run the country) it is not a playground or a think tank. The job in hand is not unlike trying to tune a racing car whilst it is being driven around a race track.

Maybe a good plan is to start small by picking a government department that is small and possibly relatively new. Try moulding that, by introducing new ways of working and create a pilot (or prototype as some innovators might say). Then play some more.

To be truly creative the Whitehall structures would need to be fluid and I’m not sure that government is ready for that just yet.

Lastly, I have one further thought. Exactly how is this to be done? Scope it, put it out to procurement and you will simply get a spec for a very large and expensive change program which will see the big consultancy boys in lunches for a long time and will be no different from what has gone before. After all, they probably ran the last change program!!

Readers will be thinking that although I promote Creativity and Innovation I am simply rubbishing the ideas of Dominic Cummings. The civil service requires reform, it does not require complete anarchy.

I remain both hopeful and sceptical that something at least a little weird will happen.

Are You Solving The Right Problem?

Out of all the people in the world, the people we tend to trust the most are probably doctors. We believe them to be experts, because if we didn’t we would probably be terrified every time we became ill.

Given this faith in doctors, how often do you suppose they actually get it right? Or more terrifyingly, how often do they get it wrong? It is not very likely that your doctor will tell you are okay when you are critically ill but what about the cases where they diagnose a common cold but your elevated temperature is related to something much more serious? Are they solving the right problem?

Studies in the US indicate a 40% misdiagnosis rate with a reasonable percentage (around 10%) resulting in avoidable death. These statistics are easily verified following autopsy.

In medicine, as with many other disciplines we need to diagnose the right condition in order to treat it. In the world of creative problem solving we must do two things. Firstly correctly identify that the problem really is causing the symptoms (business issues) that have been observed and secondly when we apply a solution, it must be tailored to the actual problem.

So what is the issue here, how does this come about? Overconfidence and over-familiarity are two good reasons. If we have experts who become complacent, or who see the same issues day in, day out they might be tempted to assume that the problem is the same problem.

Many readers will be familiar with the humorous examples regarding correlation between two completely unrelated variables appearing to show causation. For instance, per capita cheese consumption closely correlates with the number of people who died by becoming tangled in their bedsheets!

This is of course ridiculous but there are more examples on the website https://www.tylervigen.com/spurious-correlations.

A common example that I use is that of a company where sales are falling. The boss states that sales force is useless and need to be sorted out or replaced. He thinks the sales force are the cause of falling sales. A simple application of ‘Asking Why?’ is very revealing. Consider the following:

Q. Why are sales falling?
A. Because customers don’t like our products

Q. Why don’t they like our products?
A. Because they are outdated, not as cool as this year’s model

Q. Why are our products outdated?
A. Because we have not developed any new ones for 5 years

Q. Why have we not done this before?
A. Because the boss has not allowed us

Q. Why has the boss behaved in this way?
A. Because they have no spare time to spend

In this simple example our initial assumption of having a poor sales force is incorrect, the underlying issue is that the boss (possibly you!) has no time either because of high workload or poor time management. We can also see that the issue has multiple layers and unless the issues at lower layers are resolved then our initial problem is unlikely to be properly resolved. So it could also be a case of not just ‘solving the right problem’ but solving the right problems’ (in the right order).

Einstein is reputed to have said, ‘If I had one hour to save the world, I would spend 55 minutes analysing the problem and 5 minutes coming up with a solution.’ We tend to do the opposite. We assume we know the cause and then charge ahead designing remedies for the wrong issue. We need to find the root cause of the problem before even starting to think about possible solutions.

Most people from middle management upwards are expected to solve problems as part of their jobs. In fact, their superiors often say ‘don’t bring me problems, just solutions’. These people will then take the route of least resistance to pleasing the boss.

On many occasions this might work but it is always worth asking Why? Whether we are solving standard business issues or Innovators trying to solve problems that have been puzzling the world for ages, we must avoid making assumptions in order to correctly identify the problem and hence provide the ideal solution.

If you want to know more or would like a little help with this please do get in touch.

I Didn’t See That Coming – Do You Predict The Future?

Somehow, CEOs and small business owners seem to think that after a great disaster has befallen them, saying ‘I didn’t see that coming’ absolves them of all responsibility. Maybe they did not see, but that is not to say that they shouldn’t have been able to. We are talking here about being able to predict the future.

Throughout history, there have been events that disrupted the way of the world. When electricity replaced gas as a means of creating light, it revolutionised the world. I suspect that there were a few factories developing a new generation of gas-powered street lamps but by and large people saw that coming.

Later on, we have a fantastic invention, the Sony Walkman. Portable music for the masses which was replaced incrementally by DVDs, then Apple iPods and finally mobile phones. Those who have produced these devices and who have supplied the music and games for them, have had to look up and see what was coming!

Who remembers Blockbuster Video? A huge chain of video rental shops that disappeared almost overnight because it was possible to stream video online.

There have been numerous cases of shops disappearing from our high street because of the effects of online shopping. This is not simply because of the emergence of online shopping but because existing retailers have not been able to predict the effects of the emergence of Amazon (and others) nor forecast the requirements of modern day shoppers. None of those that vanished seem to have attempted to predict the future.

There is a whole area of forecasting that is concerned with what are called ‘weak signals’. Imagine that you are standing on the stern of a large ship. You see the wash from the propellers and the wake left behind. After the ship has passed over the horizon a experienced old sailor might be able to ‘read’ the wake and tell you what sort of ship has passed and combine that with the tides to tell you where it might be going.

Imagine now that the whole scenario of the ship is played in reverse. As time passes, the ship gets closer until finally you can see it. As it gets closer, the signals that you pick up get stronger. With weak signals, we use a range of techniques to scan the business horizon to build up a picture of what might happen in the future. We then keep scanning. In fast-moving industries we cannot see as far ahead as say the construction industry.

Weak signals are a way of trying to predict the future and take advantage of it. But there is a simpler and less expensive way for the rest of us.

Compare those companies who ‘didn’t see it coming’, who did not attempt to predict the future, with those who are relaxing and sipping cocktails, the big difference is they aligned with emerging trends. They saw it coming just a little bit earlier than everyone else and did something about it.

To avoid being taken by surprise I thoroughly recommend that you do the following 3 things and ‘ride the curve’:

Look ahead of the curve – scan your environment, identify and track trends. Increase the amount of business research you do and seek market intelligence rather than wait for it to come to you (via industry reports or briefings).
Think ahead of the curve – look for patterns of change, and emerging opportunities. Trying to make sense of every small piece of information will be too time-consuming. Ask yourself where will this trend, technology or driver be in 10 years and what might I need to do in response or to take advantage of it?
Act ahead of the curve – Be like the surfer catching a wave. Don’t wait for a trend to overwhelm you, take action today. Be disruptive to both yourself and your competitors.

Riding the curve means grabbing opportunities, taking calculated risks, and turning your understanding of where your industry is going into steps that take you from where you are now to where you need to be in order to profit from change.

Derek Cheshire

Derek’s Blog