Posts Tagged ‘decline’

How Do You Know If Your Company Will Fail?

Tuesday, October 21st, 2014

Let me go back almost 20 years to give you some context.How do business owners know if their company is on the path to decline?

My last real job (that’s what my wife calls the jobs I had before I became a consultant) was running the Canadian subsidiary of a 100-year-old, multi-national corporation.

Our owners, a much larger, publicly listed corporation, had bought us years before as a ‘cash cow’. There was, therefore, very limited investment in any aspect of the operations.

When I joined, the core business was rapidly being replaced by a new technology. We developed a new strategy for Canada and quickly set about executing it.

But, even when we appeared to be having some success with the new strategy, I used to ask myself if it was already too late – and how I would know if it was.

Now let’s return to the present day.

I’m re-reading Jim Collins’ book “How The Mighty Fall”. It was written as a result of a CEO asking how he would know if his company, successful as it had been, was already on the path to decline.

Imagine me asking the same question as the CEO of one of America’s most successful companies – several years before he asked it. It would indeed be remarkable, were it not for a few important details.

Clearly the circumstances were different. The CEO was being more farsighted than my employers had been.

And, more importantly, I’ll bet that many business owners have worried – and still worry – over the same question. I’m sure they started long before I asked it and some are still asking it now.

So why even raise the topic?

For one thing, if Collins’ book had been available in the mid-1990s, I would have had my answer. I would have known that, in time, the company would be sold to a competitor and, when that didn’t work, be absorbed by another competitor and almost completely disappear.

For another, “How The Mighty Fall” should be mandatory reading for all business owners. Or at least for those who understand that their past successes offer no guarantee, or even protection, for the future.

One point that caught my attention – and I’m only on page 48 – is that complacency was responsible for only one of the failed companies.

Another is that being an innovator was no protection from failure.

I would have assumed the opposite in both cases. So, perhaps I’m not as far ahead as I thought…………

 

If you enjoyed this post you’ll also enjoy Targets Are Targets, Results Are Reality

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Jim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

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Targets Are Targets, Results Are Reality

Tuesday, May 27th, 2014

Hubris can be the first of the 5 stages of decline.In the last few days, the weather, in the parts of Canada I’ve been in, has gone from chilly to hot.

About time, too!

It’s almost the end of May. The golf courses are open.

Another month and the schools will break up for summer and vacation time will begin.

And, just in case it’s overlooked in the excitement, companies with a calendar fiscal will reach the mid-point of the year. I know. I’m a dour, Scottish buzz kill.

Some business owners will go off on vacation pleased that results are ahead of expectations. Others will not be so satisfied – and some will be unhappy.

But all 3 types of owner share 1 thing in common. They know more now than they did when they set their expectations for the year.

Why is that worth mentioning?

We live in an achievement-oriented society. So we’re programmed to focus on the latter 2 types of companies – those that haven’t made their targets and those who are barely doing so.

They’re the ones who are underperforming. So they need to figure out why because they need to do better.

And that’s where our thinking often stops.

However, what about the companies that are doing well against their targets?

Is it possible that’s because their targets were low? After all, they were set around 6 or 8 months ago.

And, despite having been in the consulting business for over 12 years, I have yet to meet someone who can consistently predict the future.

Some of the owners, whose companies are doing well, will take the time to review their performance. And, if needed, change their activities to drive for even better results based on what they now know about this year’s performance.

In fact, I notice that the owners who take the time to step back and review their performance regularly, tend to have successful businesses.

The alternative, simply accepting the results as good fortune or, worse, as being their “due”, is a sign of complacency born of hubris.

And, as anyone who has read Jim Collins book “How The Mighty Fall” knows, hubris can be the first of the 5 stages of decline……..

 

If you enjoyed this post you’ll also enjoy Too Early To Tell If It Will Be A Good Year? Think Again!

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Jim Stewart is the founding Partner at ProfitPATH. He has been working with business owners for over 16 years to increase profits and improve the value of their companies. LinkedIn

Want Your Company To Grow? Here Are 3 Words To Live By

Tuesday, August 20th, 2013

“We’ve grown from start-up to over $10 million in 6 years. We think we know why but I want to be sure I really understand why. Help me figure it out.”3 words your company should live by to keep you in business

A few weeks ago, a potential client said almost exactly those words to me.

In the 16 years I’ve been working with business owners, I’d never heard anything like it.

It’s the opposite of what many entrepreneurs say and do. Normally they’re very confident that, because they’ve been successful, their company will continue to do well.

More recently, I met with another owner. The revenues in her company have halved.

To her credit she’s trying to find a solution, trying to find a way out of the industry that has matured and declined on her watch.

“Just find me ideas,” she said, “I don’t need advice, we know how to be successful”.

An interesting contrast, don’t you think?

Then, the other day, I saw something interesting that pulled it together for me.

From their earliest days, we teach our children 3 important words – stop, look and listen. We tell them to do it before they cross the road or do anything else that could cause them harm.

As adults, we lose sight of the lesson. Ask the shareholders of Polaroid, or Kodak, or DEC – or Blackberry.

Stop, look and listen – it can keep you in business.

No matter how well things are going, take time out from the day-to-day operations of your company.

Let’s face it, if things are going that well, there’s no reason you can’t take one day a month, or even a quarter, to think about the future.

Look outside the walls of your office or company. What’s happening in your customers’ industries? How do they use your products or services? What alternatives are they looking at?

And what’s happening in your industry? What’s the worst thing that could happen? Do some contingency planning.

Listen – surf the web, find out what’s trending in your industry. Attend some events; what are the rumors about competitors? What are your suppliers saying? What are your contemporaries thinking about the economy and the availability of funding?

The companies I mentioned earlier weren’t blindsided by threats they couldn’t have seen coming. They failed to react to market changes and new competitors that were around for some considerable time. No one came from out of left field with no warning.

Their leaders fell so deeply in love with their success that they were unable to overcome the blinders they put on their own thinking.

Stop, look, listen or risk seeing your success swept away.

The “something interesting” I saw the other day can be found here.

 

If you enjoyed this post you’ll also enjoy 6 Tips for Protecting Your Long Term Success

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