Is Your Business Starting to Struggle?

Business is so simple – it’s just an exchange of value between a willing seller and a willing buyer. Every day on auction sites like TradeMe, people do business.

But organising a business to keep on delivering that value, day in and day out for many  years, is hard – especially when the marketplace for your products or services is also in flux.

Smart companies will have some form of market intelligence in place so they get early warning of changes and can respond. But human nature being what it is, the reality is that when you’re flourishing, you stop looking and just expect the good times to continue.

When firms begin to struggle they may at first double down on what has worked in the past, to get them out of a hole. This is also human nature and often it works. If it doesn’t work they sometimes seek help straightaway. But mostly they begin panicking and blaming each other.

From this point on there are three main issues that can lead to a company’s ultimate demise.

1. Failure to Diagnose the Problem

Market researchers are often called upon at this point to come up with some new insight  that will help get them back on track. They go and talk to customers and potential customers and come back with  findings and recommendations. 

Most of these recommendations are just best guesses. Either they are based on what customers say they want – which is often only partially true – or – if the researcher is more savvy – what they interpret from the customer responses, but have not personally experienced.

It’s important to nail down what customers are really doing. Have the ground rules changed? Are they being affected by someone further up the food chain? Has someone offered them a significantly better deal?  Have you annoyed them in some way or become difficult to deal with compared to other firms?

But equally, you need to understand the ‘why’ – the big picture.  Are your competitors also struggling? Have market conditions changed – subtly or dramatically?

And you need to look at yourselves. Have you lost focus? Has the day to day overwhelmed the longer view?  Have you lost key staff or key clients?

Market research doesn’t usually cover big picture trends and internal issues. But in my strategic work I find these two sources of insight to be invaluable.

2. Failure to Implement Recommendations

Often there is a huge mismatch between what we think is possible and what can actually be implemented. Even  assuming your research findings are incontrovertible and the recommendations quite straightforward, companies often get in their own way.

Sometimes it’s because of individual ‘blockers’ who, for whatever reason, [strategic, conceptual, emotional, or just practical], need to stop things happening or to stave off having to change. You can identify struggling firms with blockers by the fact that though they have lots of ideas and plans, strangely nothing ever changes.

But mostly it’s collective or systemic factors that prevent coherent responses to business threats. . . Messages that get lost in translation as they travel from the ‘planners’ to the ‘doers’ . . .  an internal focus that doesn’t easily look outwards . . .  competing priorities – too many agendas or too little focus . . . .  an embedded way of doing things that doesn’t sit well with the recommended improvements . . .  inadequate tools that make change hard to implement . . . a failure to make anyone accountable. . . payments or rewards that incentivise other outcomes. . . . a high staff turnover . . . or worst of all, the departure of the person who was responsible for implementation at a critical time.

It’s amazing that change ever happens.

3. Failure to Implement Well

The general rule seems to be: what seems easy gets done – regardless of how important it is in the scheme of things.

Sadly, if you’re part of a company that’s struggling to make progress, or falling behind competitors, the things that are easiest for you to do may be the least useful when it comes to solving your underlying market problems.

There’s never just one simple intervention that will solve everything and there are many possible actions – such as restructuring or rebranding – that can create so much distraction internally, they may disrupt your  recovery.

Even when facing impending doom, a stressed out maladaptive company will have difficulty wholeheartedly buying in to a change of emphasis. That takes courage and focus, and the ability to dispassionately prioritise changes to  ensure survival.

Solution: Make It Insanely Easy To Succeed

Most struggling firms have a few key strengths they can build on, but also some major deficiencies. Sometimes they’re trying to do things [or meet the needs of clients] they just aren’t suited to. Often their markets have been disrupted and they haven’t been able to adapt fast enough. 

They will feel disheartened and risk-averse, so it’s very important that the implementation of their revised strategy feels like a positive experience.

Under the circumstances, and given what we know about people in struggling firms, the only way to guarantee their future success is to come back to the core of business and help them find a sweet spot where it becomes insanely easy for them to fulfil client expectations and attract new ones. 

This solution has several important qualities:

1. It helps to build a common frame of reference between a company and its clients – whether these relate to shared values, desired outcomes or performance standards – to encourage retention and referral.

So, for example, at the simplest  level, a struggling fish and chip shop might begin by acknowledging that their customers want fast, crisp, non-greasy, well-cooked food and resetting its systems and processes to achieve that every time.

Or a struggling accounting firm might recognise that it needs to rebuild some of its relationships with customers and develop a more practical and non-judgemental way of dealing with them.

2. It is based on a common understanding between the firm’s staff and its leaders – so that staff feel the leaders are supporting their efforts, rather than getting in the way.

Staff who have been consulted and who then see their insights and recommendations included in a company’s revised operational or marketing strategies can suddenly feel a lot more connected to the business and ready to go beyond.

But the common understanding needs to do more than that. It needs to express a shared view how the firm does business, the desired outcomes, the kind of behaviour that will be rewarded and the best kinds of  new business the firm is seeking. It’s the basis of culture and, especially in a service business, it is the basis of branding.

3.  It identifies necessary actions to support the solution and prioritises the most important.

Above all else, a struggling firm needs to focus its efforts on the factors that will make the most difference to their future – growing profitable customers, creating streamlined practices, making it easy for staff to do their job and for customers to say yes.

The leaders of the firm need to get out there, be seen, call on customers and build alliances, because activity increases positive perceptions. For the same reason, the company needs to update what needs updating – but not at the expense of the company’s financial health.

But unless new money is coming into the firm, financial investments need to be modest and targeted to critical success areas. Creativity is important and so is effective use of staff time. Experiments and pilot projects are encouraged, putting all your eggs in one basket is not.

Helping a struggling business to  recover is, above all else an exercise in psychology. It’s about helping people, with egos and possibly also livelihood on the line, to absorb bad news, improve their relationships, regain their confidence, up-skill where necessary, develop an experimental mindset and perform the delicate task of focusing on what matters while  avoiding tunnel vision.

It’s one of the most magical things you can do.

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Do It Yourself Brand Design

Friends of mine recently saved their firm over $100,000 by taking the design of their new brand and website in-house. Previous branding exercises had cost well in excess of that amount. Perhaps because of that sunk cost, the company had waited too many years to repeat the exercise, so their visual brand had become sadly dated, compared to their competitors.

The new design is beautiful. It was made by a designer who currently has a more generic marketing role within the firm. It uses a recent font. It is contemporary but also classic. Future updates will be no more than tweaks because this branding mirrors and enhances the real DNA of the firm and its client relationships.

But though the budget to do this work is in place, the company’s cash flow has been terrible, so even the $40,000 to $50,000 they need to update every visual element – including stationery, promotional signage, the website and building signage in multiple locations – has been hard to liberate.

Yet the new visuals are an essential component of a strong new marketing strategy. Waiting until cashflow improves would create a serious loss of momentum and opportunity.

Three Branding Mentalities

So do you wait till the money is there and do everything all in one hit, or do you phase it in and spread the load?

The ‘process’ mentality is to create an interlocked branding system and implement it all at once – purge every old element from the system and launch a fresh new look. Get economies of scale by hiring one, or at most two firms to handle all the work. 

The ‘entrepreneurial’ mentality is to prioritise the most critical elements and remove or de-brand the rest until there’s money in the budget. Follow the 80:20 rule and do the small number of things that will lead to the greatest impact. And manage the project yourself.

The ‘corporate’ mentality, by comparison, focuses more on prestige and on creating design solutions that can be easily defended against internal criticism. High profile designers, ‘talkable’ designs, serious launch publicity . . .

I recommended they take an entrepreneurial approach, prioritising visual elements that are linked directly to client communications and new business opportunities, keeping the rest in the pipeline but spreading them out to optimise the cash – because as every small and medium sized business knows: ‘cash flow is more important than your mother’.

In My View

In my view, visual identity is a key brand support, and it must reflect the brand essence, but it’s only the outer layer of a company’s brand. Especially if that company provides services rather than products.

You and your staff are the true embodiment of the brand. So the visuals you use need to signal what’s important and different about you.

And  since your client relationships represent evidence of the brand in action, whatever visuals you use to represent yourselves must subtly influence both staff and client expectations.

The staff must know the full rationale. Ideally it will resonate deeply with them and make them feel individually and collectively proud. Clients operate more on impressions, so it’s important that there is congruence – that what they see is what they get – but not necessarily complete uniformity. Clients in different stages of a relationship need to both see and experience different things.

We have come a long way from the days where companies with problematic or sub-standard products and services could simply use shiny visual branding to cover up their ‘unsightly blemishes’.

Knowing who you really are as a company is everything – it’s where great branding is born. So don’t waste money on visual devices that deliver very little to the overall impression your firm leaves in the world.

And when it comes to spending on individual visual brand elements,  if in doubt, don’t.