Don’t Kid Yourself

To say that we are living in unusual times is to (under)state the obvious.  For those who read George Orwell’s 1984 in school, willingly or not, there is much that is hauntingly familiar about the past year.  But this column is not about politics. It is, however, inspired by a world in which “alternative facts” exist, and official statements are made whose veracity can be refuted by the laziest of Google searches of credible sources.  What we’ll talk about today is a risk to which many business owners and executives often unwittingly expose themselves, namely fact-free assumptions about their business and its place in the market.

Call it self-delusion, pride, arrogance, bravado, lack of information, whatever, but the result is the same: if a business and its management don’t unambiguously (read: fact-based) understand their strengths, their competitors and their strategic direction then there is a high likelihood that their tenure will be short.  The toughest thing a leader can do is look him or herself in the mirror and honestly appraise their performance, understanding and operational integrity.  Failure to take that hard look is a mistake, because while even marginal businesses may thrive when the world around them is good, when things take a turn downward, as they always do, only the prepared and self-aware will continue to thrive.

The first step in getting that preparation is to honestly appraise the business, leadership included.  Think hard about strengths and weaknesses, but don’t just stay inside your leadership bubble.  It’s true that when people are asked for their input they feel compelled to offer something up, often unencumbered by the thought process, it’s still immeasurably valuable to talk to your customers, ex-customers (sometimes you get the best info from them, and occasionally even win one back), sales team, folks on the plant floor, middle management, anyone willing to share an opinion.  Yes, you will need to sift through a lot of dross to get to useful information but it will be there.  Common themes will present themselves, and as often as not there will emerge a few things you and your management didn’t know or, frankly, had ignored or explained away.  If everything comes back thumbs up then either you are the greatest business person of all time or no one is willing to risk telling you their true views—and that’s a problem that needs to be dealt with right away!

Next, it’s important to be very clear about what your business is all about.  What its reason for existence is.  This doesn’t need to be noble or high minded; a clear elevator pitch is more important than elevated prose.  Framing the boundaries of what you offer for sale is critical because it keeps you focused.  It becomes a test against which a customer request can be measured.  The second hardest lesson in business is learning to say “no” to a prospect or customer, but always saying yes can land you in the weeds faster than anything else I know.

Often lightly brushed over or ignored entirely is a clear understanding of your competition.  Local or national, you will have competitors and you need to know who they are, what they are doing in the market, where are they finding success, where are they lagging.  Competitive intelligence (I mean legal, research-based, publicly-available-information-driven-intelligence) is critical to understanding your place in the market and where to place your strategic efforts.  But just as following the taillights of the car in front of you in a snow storm is not always such a good idea (you might both wind up in the same ditch), just because your competitor is doing one thing doesn’t mean he’s right.  Competitive information is input to your own planning, along with your own experience, strategic vision and yes, even your gut.  Knowing what they’re up to informs pricing, product and service features, customer perks, emerging trends.

So too, take some time to read industry publications and get a sense of your broader market, the economic and social trends that will help guide your planning.  If you’re over 40 you’re old enough to have seen entire industries be supplanted by new ones.  Forewarned is forearmed.

Lastly, know how you differ from your competition.  Is it on price? Customer service? Speed or cost of delivery? Unique features of your products?  Understanding those differences is important because some are real differentiators and others are easily challenged.  And here, again, being honest is more important than being self-satisfied.

As with most things in life, you can’t know if you don’t know, and in what we can expect to be rapidly changing times, knowing is more important than ever.

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