For many traditional businesses that have been around for a long time, it’s easy to fall into the trap of keeping things the same, because that’s how it’s always been run. And who can blame them? I mean, there’s literally proof that these processes have worked in the past for them, so why wouldn’t they continue to work in the future?
And as with any kind of change, there are hurdles that can discourage such a change as implementing new software, processes and technology. There’s that fear of the unknown and the risk of something new. It’s totally normal for them to think that a new change could cause more harm than good and affect the competitive edge that they’ve spent so long perfecting.
Let’s face it, the entire world has been going through a lot of change recently. This has made a number of businesses reconsider their strategies and what they think of ‘change’. Albeit necessary, it definitely hasn’t made change any easier!
If the above sounds a bit like what you might be going through, then hopefully throughout this article we can address some of your concerns and provide you with some confidence to make the changes that could help you go from ‘surviving’ to ‘thriving’ in the changing world we’re living in.
In this article we’ll be answering the following questions:
- Why is the strategy of keeping things the way they are, not a good strategy?
- What are some of the signs that indicate that a business is simply ‘surviving’?
- What kind of strategy should businesses be adopting in today’s environment?
- What are the risks of not keeping up with competitors and not looking at opportunities to innovate within your own business?
- What kind of things does innovation entail? Where is the best place to start?
- Who should be involved with these changes?
Before you consider making these changes…
It’s important to understand where you want to go with your business. Are you expecting to wind down and cease business in the next 6 – 12 months? Or are you wanting to grow and succeed in the foreseeable future?
If the answer is ‘yes’ to the last question then keep reading!
It’s definitely worth first asking yourself and defining where you want your business to be in a year’s time. Now you can take on the task of innovating your business.
Why is the strategy of keeping things the way they are, not a good strategy?
A simple answer to this question is, because of your competitors. Your competitors are the major element that have changed the landscape of your industry. They have responded to technological changes that have impacted you on an individual and societal level and consequently the way you do business.
So since your competitors have changed and leveraged technology, it makes sense that your business must also keep up and change.
What are some of the signs that indicate that a business is simply ‘surviving’?
Firstly we’re going to assume in this situation that your business has been around for some time, and that you are across and understand the basics of how to keep your business going, i.e., your being across your finances, cashflow, profitability, budgeting etc.
The businesses that would be in the category of ‘surviving’ are probably in a state of stagnation. In this state of stagnation the warning signs are more gradual, so you’re only going to see the effect of these signs when looking at trends over a period of time.
Some of the indicators are:
- Your business is gradually losing customers and as a result, your revenues are starting to dip
- Your profit margin isn’t substantial and it’s taking you and your staff a lot more effort to maintain this small profit margin
- You are losing the ability to maintain your usual level of service to customers
- You find yourself spending too much on repetitive, time-hungry tasks
- Your staff turnover is higher than usual or your staff satisfaction levels are generally low
If some of these indicators are resonating with your business, then it’s probably a good sign to consider a change in your business strategy.
What kind of strategy should businesses be adopting in today’s environment?
Businesses should be adopting a client first approach. This might be something you’re doing already, but if you’re unsure, consider these questions:
- Are you aiming to provide the most value to your customers?
- Are you able to anticipate the needs of your customers and do your processes reflect this?
- Are your prices competitive?
- Are you giving your customers the best possible experience when it comes to their interaction with your goods and/or services?
- Is the communication that you have with your customers regular, accurate and consistent?
If the answer is ‘no’ to any of these questions, then it may be time to review your processes and look for opportunities to innovate and build a more client first business strategy.
What are the risks of not keeping up with competitors and not looking at opportunities to innovate within your own business?
The biggest risk of not changing is that your customers leave you for your competitors.
Competitors that have decided to change and leverage the latest in technology will gain the upper hand, ultimately having higher customer retention and increased customer sales from new customers. This is because their focus is on their customers and improving the experience with their services and/or products.
You may already be aware of competitors innovating in your space, and wonder if it’s even worth copying or making the same steps if they’re already doing it. You may also worry that copying competitors may take away your competitive edge, at the same time as losing your traditional methods of doing business that have kept you successful so far.
Firstly, it’s not about ‘copying’ your competitors. It’s about ensuring that you maintain a baseline of competitiveness, and from that point, assessing internal opportunities and innovating from there.
Secondly, good innovation will support the core values of your business, which is what makes your business unique.
Good innovation won’t change your business and what it values simply for the sake of new technology, and it certainly won’t take away from the trust that your business is built on. Innovating for the sake of new technology, without considering where the opportunities actually are, is when you risk undermining and losing intrinsic qualities that have given your business its competitive edge in the past.
What kind of things does innovation entail? Where is the best place to start?
There are a few preliminary steps you can take before you start to commit to any particular change.
- Determine a baseline standard for your industry
- Research relevant technologies
- Conduct an internal S.W.O.T analysis (Strengths, Weaknesses, Opportunities, Threats)
- Document and assess current processes and systems on a regular basis
- Consolidate, prioritise and plan
As briefly mentioned in the question before, one step is to observe what your competitors are doing and determine a baseline standard for your industry. After that, you may want to assess the technological landscape to see what’s out there and what potential opportunities exist out there that could suit your business and add to its competitiveness.
Additionally, an internal assessment of your business to determine where you do well and where you might need to improve, could also highlight some potential opportunities for innovation.
Start by documenting your daily and weekly internal processes and systems, even if it’s just dot points. A labour cost should be associated with all the processes that you list, as this will provide helpful information when it comes to deciding the best course of action to take financially too. In addition to the cost of the process, include the cost of customer retention and any opportunity costs related to that process.
This can seem like a lot of work, especially if you are a small business! Some aspects such as opportunity costs may be difficult to determine, if it isn’t your area of expertise. So, it’s best to recruit people that have the most relevant experience and knowledge, to help get the information that you need to make the best decisions.
Such people could be a particular vendor you’ve worked closely with, your accountant, or a technology consultant like us at Enee that has an understanding of the available solutions out there. These people are in the best position to help review the technological landscape of your industry and assess opportunity costs for you.
The next step would then be to consolidate all this information and come up with a plan and a budget. You are likely to come up with a list of things that you may want to improve; this is where your associated costs can help you weigh up and decide on the most critical areas. You’ll end up creating a list based on priority, which you can progressively work through.
Who should be involved with these changes?
When you’ve decided that you want to embark on a project to spark innovation in your business, who you get involved is going to be a key consideration.
In addition to third-party experts that you may employ at various stages of your innovation journey, you’ll also want to ensure that key stakeholders are involved early on in the process, and every step of the way after the project begins. They will be critical in determining what strengths and weaknesses exist in the preliminary stages, and will be a key player in providing feedback and validating outcomes throughout the life of the project.
If you decide to take on a project with Enee, you will be assigned a dedicated project manager and a consultant.
Your project manager will:
- Keep the project moving forward
- Ensure that the project keeps to budget
- Provide regular updates to keep you in the loop every step of the way
Your consultant will be there at the start to get to know you and your business, they will:
- Suggest solutions for what you’re trying to achieve based on their expert understanding and knowledge of the technology industry, and how it can best suit your specific business.
- Be available to answer any of your questions and give you all the relevant information you’ll need to help you make the best decision.
Innovation and change in a business can seem like an unnecessary, daunting task. The reality is, however, that the ever-changing and evolving world around us requires us to change as well. Not only that, but your competition is also constantly changing, as other businesses adopt innovation, and new competitors enter the field fresh on the latest trends. The risk of not changing is losing your customers to these competitors, who are actively participating in change and thus are able to continuously meet the changing needs of their customers.
If you plan on continuing to be a successful business and want to maintain a decent profit margin, then your best chance will be to embrace that change in your stride as well.
In order to do that, focus on your customers and change your business strategy to have a client focused approach. Looking at what your customers need will give you some pretty great clues as to where you can bring in some innovation, finding better, more efficient ways of not only meeting their immediate needs, but going beyond that to even anticipating their needs.
At the beginning of this journey it’s important to document and quantify the cost of regular processes, and assess where opportunities lie to improve your business, or differentiate your business from your competitors. You may want to reach out to a technology consultant such as us at Enee to get a better understanding of what technologies are out there that your competitors are using, and what technologies you may want to adopt to become more competitive in the market.
Hopefully we’ve responded to some of your concerns about change and why it’s necessary for your business not to just survive, but thrive. Investing in an expert opinion here will be of great value to the future of your business, especially if technology is one of those opportunities you highlight doing this process. If this is something you want to explore further, feel free to get in touch