“A ship in port is safe, but that’s not what ships are built for.”
Many companies that survive an economic downturn do it by cutting everything that doesn’t keep the lights on and the doors open. In that condition, they are treading water. They may avoid catastrophe, but they’re not going anywhere. The company is set on “idle.”
Allowing the company to idle until the trouble passes might be the right thing to do, but sometimes companies continue to idle even though the worst of the trouble has passed. Why? In most cases, it’s because the CEO doesn’t trust that business conditions are really improving. Maybe we’re experiencing only a brief lull in the storm before it resumes its full fury.
People . . . and therefore, the corporations they create . . . are at their core, cautious and conservative. We have a sense that doing nothing is a safe bet. It’s not. Doing nothing is a conscious choice, and it may not be the safe choice. Our business history is littered with examples of companies standing by while smart, aggressive competitors swooped in to grab market share and competitive advantage.
Obviously, perilous economic times call for some degree of caution. But beware of too much caution. If you keep your ship in port too long, you’ll wake up one morning to find all the cargo is being carried by a competitor’s ship.
For more small business blogs, visit my website at www.rocksolidbizdevelopment.com.
Showing posts with label Avoiding inertia. Show all posts
Showing posts with label Avoiding inertia. Show all posts
Monday, May 31, 2010
Monday, July 27, 2009
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.
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.
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