flevyblog

Flevy Blog is an online business magazine covering Business Strategies, Business Theories, & Business Stories.
MANAGEMENT & LEADERSHIP STRATEGY, MARKETING, SALES OPERATIONS & SUPPLY CHAIN ORGANIZATION & CHANGE IT/MIS Other

Business Is a Contact Sport

Editor's Note: Take a look at our featured best practice, Cost Segregation Study: Multiple Property Class Analysis (Excel workbook). Accountants, accounting firms, and real estate property owners can all benefit from this cost segregation study (CSS) template. It makes the estimated benefit easy to figure out and has flexible assumptions for high level or detailed segregation analysis. You get a summary of cost [read more]

* * * *

business_boxingToo many businesses, young or old, struggle or fail because they never understand that you have to practice, practice, practice, then get in the ring and fight as if your life depended on it!

Business is a brutal contact sport for five main reasons, and it’s getting worse.  You will not survive, grow and prosper:

  1. if you don’t listen to and learn from your customers and others who know more about them than you do
  2. if you can’t sell to customers empathically and build their sustained trust and loyalty
  3. if you don’t understand and outmanoeuvre the competition in whatever form it comes
  4. if you don’t learn fast and adapt by experimenting, finding out what works, and perhaps even more importantly, drop like a stone your cherished preconceptions, prejudices and sacred cows that don’t or won’t work
  5. if you can’t retain, motivate and enthuse great staff.

If you want to win, and go on winning, be prepared.  It will bruise you like going 15 rounds with Muhammad Ali!

The bewildering choice available to customers and their ability to gather and test information rapidly via the Internet are ruthlessly exposing weak business models, knowledge, thinking, attitudes, character, messages and behaviour like never before.

On 1st January, my 4 business partners and I officially re-launched my company Resolve Gets Results to address the same three problems we constantly encounter in businesses we work with, which drive us crazy!

  • They are obsessed with their product or service, which they assume everyone will love like they do, not with customers.
  • They are dangerously preoccupied and distracted by internal perspectives (what I call ‘inside-out thinking’), including unrealistic financial objectives, restructuring, unsubstantiated opinions, personalities, personal crusades/ego trips, power struggles and politics.
  • Under no circumstances do they want to know what their customers really think – it’s too inconvenient or threatening!  So they guess what customers are thinking and then convince themselves that it’s reality!

The vast majority of us are guilty of at least one of these mortal sins some or much of the time.

If you don’t believe me stop and think for a moment.  Ask yourself the following questions and be brutally honest:

  1. Who runs your organisation and influences or dictates its culture, attitudes and behaviours?  To what extent do they seek, understand or accept customer perspectives on your business and your marketplace, especially if these contradict their own prejudices and personal objectives?
  2. Is your organisation focused on minimising cost and maximising profit, irrespective of its effect on customers?  Does it believe it can tell customers what to think and how to behave?
  3. How often do you commission meaningful, emotionally intelligent, independent research to understand what your customers (and others in your marketplace) really think of you, your business, and your products and services – warts and all?!  And if you’re scared to know, like most business leaders, or it doesn’t even occur to you that it might be important, ask yourself how you would feel if you survived a car crash in which someone you love dearly was killed because you were driving recklessly, without due care and attention.  Then imagine that all of the people who work with and for you were killed in a crash caused by you, and think of the impact on their loved ones.  This may sound extreme, but I once worked for a 400 employee company which failed due to reckless leadership and I have observed similar situations repeatedly for 18 years since then as a consultant, turnaround specialist and interim manager.
  4. Is the basic stance of your organisation that it knows most, if not all, of the key information it needs to succeed, or is it engaged in a never-ending quest to learn and adapt better to the marketplace?
  5. Does your organisation have a clear and compelling purpose beyond profit, and does it treat cash and profit as blood and oxygen – essential for healthy life, but not its core purpose?
  6. Do the majority of your staff believe in your organisation and feel they truly own its core purpose?  Does it excite them?  If not, why not?
  7. Hand on heart, are most of your business decisions made intuitively, using gut feel, often impatiently due to the pressure of expectations or the need for quick results, instead of by gathering objective data, analysing it carefully, and refusing to be stampeded without good reason?
  8. Do you post-rationalise your mistakes, secretly dispose of the bodies, pretend you knew what you were doing and it wasn’t your fault, blame others and forces beyond your control, fail to learn any lessons and/or find yourself repeating the same, or similar, mistakes?  Top Tip – accepting your mistakes and apologising for them is one of the most cathartic, liberating and enabling steps any leader can take – welcome to humanity. It WILL make you a stronger, better and more respected leader – guaranteed.  In the eyes of the majority who matter most it will NOT be seen as weakness.

Here are some situations I’ve dealt with personally:

  • Last year I spent time helping a recent start-up company.  It uses a pure online business model to market and sell decorative products to consumers and businesses.  Its investors wanted faster sales growth and requested that it build a business-to-business (B2B) sales pipeline by contacting prospective business customers and actively selling to them.

Unfortunately the company found it difficult to think outside the collective experience of its founders, beyond the online sales model.  It did not understand B2B selling and was unwilling to listen to professional sales advice and expertise.  It tried to impose its own opinions of how to sell to B2B customers.  It could not understand why it was important to actively manage existing major corporate accounts with whom it had negotiated potentially lucrative, exclusive content licences on 2 year contracts, or why it was important to tackle large target customers who could place regular repeat and/or large orders.  The company made untested assumptions that these large prospects would demand minimum annual sales guarantees and/or upfront royalty payments, so it refused to take them seriously.  In one case it ignored a huge potential business opportunity with a major global music rights company who loved the product but wanted a high volume retail, not online, sales strategy, and was prepared in principle to consider waiving minimum annual sales guarantees and upfront royalty payments.  Similar opportunities existed with numerous globally recognised sporting brands and there was a limited window of opportunity (say 2-3 years) to harvest these opportunities, which required rapid action and dedicated effort.

  • A home furnishings company employing 450 staff persuaded a large venture capital firm to back a management buy-out (MBO) based on a business plan that predicted dramatic sales growth.  18 months later the company was in turmoil and in danger of going under.

Careful investigation quickly exposed fatal flaws in the MBO strategy.  The company had switched focus away from its traditional, high end, highly profitable customer base and begun chasing high volume, lower margin sales with out-of-town, warehouse-type home furnishing and accessories stores.  To meet their aggressive price points the company had outsourced all production from the UK to Pakistan – as a result lead times on orders were now 3 months whereas previously they had been 1 week or in some cases less!

This strategy proved catastrophic.  Established, loyal customers who paid healthy margins and were willing to pay even higher prices received terrible service and began to move elsewhere.  Meantime the large warehouse-type retail chains kept cancelling or changing orders, leaving the company with a growing mountain of unsold stock.  The company had built its very own perfect storm out of nothing, due to reckless greed and arrogance!

Sadly, the results were inevitable.  The company refused to accept the brutal realities (though it was almost certainly already too late) and the venture capital firm was powerless to do anything as it had only 49% of the shareholding.  8 weeks after I presented my findings the company went into administration.

  • I’ve recently been working for the UK marketing and distribution arm of a large, traditional American corporation which has acquired multiple manufacturing businesses around the world over many years.  Like many large organisations it is struggling to respond to rapid changes in technology, systems, management thinking, customer needs and competitive pressures.  Its current business processes are truly labyrinthine and require drastic simplification and modernisation.

The visionary, inspirational UK Managing Director has been in post 16 months and is determined to ‘turn the oil tanker round’ as he has done previously in several other, unrelated businesses.  This will require several key initiatives including a radical new commercial strategy, the development of a continuous improvement culture, more responsive and user-friendly IT systems, redesigned business processes, and above all far greater commercial agility reacting to accurate customer and market intelligence.  All of this will depend on a realisation and commitment from the company’s European and US corporate bureaucracies of the need to adapt to brutal market realities and throw out its many sacred cows to avoid long-term extinction.

The ability to face up to painful decisions about what is actually core and what often appears core but in truth is no more than a self-deluding comfort blanket is arguably the single most important determinant of a business’s survival and long-term prosperity.  It is one of the crucial differences between Top 1% performers and everyone else.  Top 1% companies ground their decisions in customer and market facts and data; everyone else is far too prone to opinion, hearsay and wishful thinking, and too often will accept false premises simply because they are driven by strong personalities or seemingly unstoppable juggernaut bureaucracies – “we do it this way because we’ve always done it this way”, or “because we’re ABC Corporation”, so by implication we know better and have a right to tell customers what they can and cannot have!  This is folly – pride always comes before a fall and companies never know more or better than the market.

Do you recognise any aspects of your own company’s behaviour in any of these stories?

Fortunately I’m also dealing with entrepreneurs and businesses who are alert to the dangers, willing to listen, experiment, learn, and be guided.

No matter how strong you believe your business model, products and services are never be afraid to subject them to the rigours of constant ‘sparring practice’ in the gymnasium before each ‘big fight’.  Otherwise you may end up losing on points or even getting knocked out.  Always remember that business is a contact sport and the more contact you get the more resilient you will be when someone or something throws you a vicious right hook.   Complacency is a killer!

145-slide PowerPoint presentation
Digital Transformation is being embraced by organizations across most industries, as the role of technology shifts from being a business enabler to a business driver. This has only been accelerated by the COVID-19 global pandemic. Thus, to remain competitive and outcompete in today's fast paced, [read more]

Do You Want to Implement Business Best Practices?

You can download in-depth presentations on 100s of management topics from the FlevyPro Library. FlevyPro is trusted and utilized by 1000s of management consultants and corporate executives.

For even more best practices available on Flevy, have a look at our top 100 lists:

These best practices are of the same as those leveraged by top-tier management consulting firms, like McKinsey, BCG, Bain, and Accenture. Improve the growth and efficiency of your organization by utilizing these best practice frameworks, templates, and tools. Most were developed by seasoned executives and consultants with over 20+ years of experience.

Readers of This Article Are Interested in These Resources


Excel workbook
General Overview Advanced Financial Model including DCF & Valuation, suitable for any type of business/industry and fully customizable. Template is built using Financial Modeling Best practices and includes Scenario basis 3 Statement Financial Model for First Year and up to 10-Year Forecast [read more]


 
Excel workbook
 
 
Excel workbook

About Mark Ashton

Mark Ashton is a UK business leader, developer, entrepreneur and consultant whose passion is starting, growing or restoring great businesses that outstrip customers' expectations. His leadership mettle and die-in-a-ditch, selfless business principles were first forged in the early-1990s in the US, where in 4 years he led 250% growth of a 2 year old textile machinery sales and service company against a backdrop of industry decline and fierce, entrenched competition. Since then he has led and advised on start-ups, turnarounds, and growth, strategy, improved business metrics and customer-driven Lean (continuous improvement) projects in SMEs, mid-sized and large corporates, in widely differing industries. He brings strategic insight, courage, honesty, common sense and motivational skills to help businesses survive, avoid pitfalls and grow sustainably. Over the next 5 years he and his close-knit team of C-level experts intend to build a hands-on, long-term investor company that will apply tried and tested, winning principles of enduring Top 1% businesses to create exceptional shareholder value. You can connect with Mark on LinkedIn here.


Complimentary Business Training Guides


Many companies develop robust strategies, but struggle with operationalizing their strategies into implementable steps. This presentation from flevy introduces 12 powerful business frameworks spanning both Strategy Development and Strategy Execution. [Learn more]

  This 48-page whitepaper, authored by consultancy Envisioning, provides the frameworks, tools, and insights needed to manage serious Change—under the backdrop of the business lifecycle. These lifecycle stages are each marked by distinct attributes, challenges, and behaviors. [Learn more]

We've developed a very comprehensive collection of Strategy & Transformation PowerPoint templates for you to use in your own business presentations, spanning topics from Growth Strategy to Brand Development to Innovation to Customer Experience to Strategic Management. [Learn more]

  We have compiled a collection of 10 Lean Six Sigma templates (Excel) and Operational Excellence guides (PowerPoint) by a multitude of LSS experts. These tools cover topics including 8 Disciplines (8D), 5 Why's, 7 Wastes, Value Stream Mapping (VSM), and DMAIC. [Learn more]
Recent Articles by Corporate Function

  

  

  

  

  

The Flevy Business Blog (https://flevy.com/blog) is a leading source of information on business strategies, business theories, and business stories. Most of our articles are authored by management consultants and industry executives with over 20 years of experience.

Flevy (https://flevy.com) is the marketplace for business best practices, such as management frameworks, presentation templates, and financial models. Our best practice documents are of the same caliber as those produced by top-tier consulting firms (like McKinsey, Bain, Accenture, BCG, and Deloitte) and used by Fortune 100 organizations. Learn more about Flevy here.
  


OUR CORE OFFERINGS
Flevy Marketplace: Top 100
· Strategy & Transformation
· Digital Transformation
· Operational Excellence
· Organization & Change
· Financial Models
· Consulting Frameworks
· PowerPoint Templates
FlevyPro (Subscription Service)
KPI Library
Streams (Functional Bundles)
Flevy Executive Learning (FEL)
PowerPoint Services

FREE Resources

About Flevy
Management Topics
Marcus (AI-Powered Consultant)
Partner Program
LinkedIn Influencer Marketing
FAQ / Terms / Privacy / Blog
Contact Us: support@flevy.com



CONNECT WITH US!
       
TOP 100 TRENDING TOPICS
Acquisition Strategy
Agile
Analytics
Artificial Intelligence
Balanced Scorecard
Best Practices
Big Data
Breakout Strategy
Business Continuity Planning
Business Plan Financial Model
Business Transformation
CMMI
COBIT
Change Management
Cloud
Communications Strategy
Company Financial Model
Competitive Advantage
Competitive Analysis
Consulting Frameworks
Continuous Improvement
Core Competencies
Corporate Culture
Cost Reduction Assessment
Customer Experience

BROWSE BY FUNCTION
Strategy, Transformation, & Innovation
Digital Transformation
Operational Excellence and LSS
Organization, Change, & HR
Management Consulting

Customer Journey
Customer Service
Cyber Security
Data Privacy
Decision Making
Digital Marketing Strategy
Digital Transformation
Digital Transformation Strategy
Due Diligence
ESG
Employee Engagement
Employee Training
Enterprise Architecture
Growth Strategy
HR Strategy
Hiring
Hoshin Kanri
ISO 27001
ITIL
Information Technology
Innovation Management
Integrated Financial Model
Kaizen
Kanban
Key Performance Indicators

ADDITIONAL RESOURCES
Business Strategy Frameworks
Case Studies
Consulting Training Guides
COVID-19 Trend Data
Digital Transformation
Financial Advising Services (FAS)

Knowledge Management
Leadership
Lean
Lean Manufacturing
Logistics
M&A (Mergers & Acquisitions)
Manufacturing
Market Research
Marketing Plan Development
Maturity Model
McKinsey PowerPoint
McKinsey Templates
Operational Excellence
Organizational Change
Organizational Design
Performance Management
Post-merger Integration
Pricing Strategy
Process Improvement
Process Maps
Procurement Strategy
Product Launch Strategy
Product Strategy
Project Management
Quality Management


Free Resources
KPI Library
Lean Management
Lean Six Sigma Training Guides
Marcus Insights
Operational Excellence

Real Estate
Remote Work
Restructuring
Risk Management
Robotic Process Automation
SWOT
SaaS
Sales
Scrum
Service Design
Six Sigma Project
Social Media Strategy
Strategic Planning
Strategic Thinking
Strategy Development
Supply Chain Analysis
Sustainability
Target Operating Model
Team Management
Total Productive Maintenance
Value Chain Analysis
Value Creation
Value Stream Mapping
Visual Workplace
Workplace Safety


Product Strategy
Small Business Owner
Startup Resources
Strategic Planning
Strategic Planning Process
Value Innovation Strategy


© 2012-2024 Copyright. Flevy LLC. All Rights Reserved.