Cut Your Losses and Move On

“If your horse dies, get off.”

Inertia can be a terrible thing. It can keep us rooted in decisions and activities that may no longer be productive. It can keep us astride ol’ Trigger long after it has become obvious that Trig isn’t going anywhere.

For example, let’s say we launch a new product or service, but the new offering isn’t getting the acceptance in the marketplace that we had planned. We try different pricing models and different promotional efforts, but nothing seems to help. What should we do? After all, “We’ve invested a lot of time, effort, and resources in this thing. How can we quit now?” A more practical course might be to concede that the horse is deceased, give the animal a decent burial, cut our losses, and move on.

We often see the same behavior in personnel decisions. We don’t want to face a hiring mistake because it took a lot of time, effort and money to find this person and to get him or her trained. We tell ourselves, “We can work with this person. We can get this person turned around,” because we don’t want to lose our investment and have to start the whole hiring process over again. In many cases, this causes us to waste even more time, money and effort before we finally have to face the inevitable. Again, a better solution is to concede the problem, deal with it, and move on.

Can we avoid these situations? No, we can’t. As business people, we all make decisions that do not create the results we expect. But we can defeat inertia. Before we make an investment decision . . . whether it’s an investment in people, equipment, or new products . . . we should lay out clear, measurable results we expect from this investment, and a deadline for achieving those results. And we need to determine, in advance, what action we’ll take if the expected results are not achieved by the deadline we have set. This approach takes a lot of the emotion and trauma out of the situation because we’ve mapped it all out in advance. At this point, we’re simply executing a plan designed to prevent inertia and to avoid investing more than we intended. We’re saying, “We’re prepared to invest this much in resources over this period of time. If at the end of that time, we’re not achieving the results we expected, then we will intervene and take this corrective action.”

Let’s be honest. We’ve all been there, probably multiple times . . . the magnificent stallion we thought we were riding turns out to be a broken down old nag. That’s not the issue. The issue is how we dismount in a timely, disciplined, and orderly way. The better we are at doing that, the quicker we can climb aboard our next steed, and this one may actually be the stallion we want.

For more small business blogs, visit my website at www.rocksolidbizdevelopment.com.

Planning Isn't Optional

“The nicest thing about not planning is that failure always comes as a complete surprise and is not preceded by a period of worry and desperation.”

Many small business owners do not engage in any real, substantive planning activities, even though planning will do more to move the business forward than anything else they can do. This is often because:

a) they are so busy putting out the fires of today that they don’t have time to worry about tomorrow, or
b) they believe it is a waste of time to produce a plan document that will sit on a shelf collecting dust and never play a meaningful role in the management of the business.

The most successful business people find time for planning despite the daily fires that need to be put out, and these leaders insist that the results of the planning regimen become an essential tool for making decisions and managing the business. It’s not an either/or proposition. It’s both. We’re going to put out today’s fires and execute a plan for tomorrow.

The planning process need not, should not, be a complex, onerous task. It’s a simple activity that defines where we want to go as a company, where we are now, the steps needed to get us where we want to go, and a timeline for accomplishing those steps. That’s it.

If your company does not do any serious planning, start now. If you need help with your planning process, go get it. Your business will travel down a path of some kind. The only question is, will your business travel down a path toward the destination you have chosen for it? Or will it go down a path random circumstances have imposed upon it and lead to . . . where? The answer should be obvious.

For more small business blogs, visit my website at www.rocksolidbizdevelopment.com.