Rocking the Boat of "Business as Usual"

As a result of the amount of feedback on our previous articles on the psychology of change and having met with a number of business over the past few weeks, I want to veer off course slightly to address what I consider to be a very real and pressing trend that is rife in the marketplace.

In this article, I want to rock the boat of the way we do business by playing devil's advocate to challenge your thinking on "business as usual" and what is happening in the marketplace at this very moment.

A Sign of the Times

Most (if not all) business owners and executives in Australia would agree that 2013 was a challenging year economically. We were hit by the plateau in the mining industry which had a domino effect across most industries. Some of us are still shell-shocked by how it has impacted our own businesses as well as the number of insolvencies and take-overs of some large and well-respected firms, some of which had been around for decades.


Despite the doom and the gloom, the New Year brought with it a slight lift in optimism as we start to see some indication of the world economy recovering. For many, 2014 is viewed as the year of recovery. However, challenged with reviving the business, many organisations fall into the trap of "business as we were used to." This poses a very real threat to their continued profitability and sustained growth.

The Challenge

Speaking to a number of CEOs and senior managers during the past few weeks, most indicated having lost some sizeable contracts as a result of some of their clients closing their doors or simply battening down. In addition, business has become cut-throat with significant price cuts by the competition driving prices down across the market. A number mentioned that they had one or two contracts enabling them to barely keep the business afloat. Questioning them on what they were doing to generate more business, the typical answer was banging on more doors and making more phone calls than before.


To a great extent, business as we have known it during the mining boom, has changed and in turn, has caused a huge awakening call among many companies and SMEs in the marketplace. Gone are the years where we relied on the repeat business of a small number of clients and making a good living out of it. We need to become more proactive and smarter at how we do business!


The issue with the Australian market is that for many business-to-business (B2B) companies, there is little change of the pool of prospective clients available, which in some instances, has even shrunk. The competition for these clients' business is becoming fiercer by the day as more competitors are fighting over the same bone having less meat on it. In this, what I can only describe as a frantic environment, an alarming number of business owners and senior managers admitted to having to slash their own prices as a result of being undercut by their competition. This gives way to a worrying downward spiral where more pressure is on senior management to drum up more work and keep their employees productive, and in doing so, keep the 'nagging wolves away from the door.'


In this whole equation there is a bit of a problem: by nature most of us are creatures of habit; we keep with the familiar. Thus we do what we've always done - we knock harder on the doors of our existing and prospective clients within those industries we've always focused on. We make more phone calls. We try to compete by reviewing and reviewing again our prices. And we waste more time and capital on marketing and business development practices that have worked in the past. Yet, they are becoming increasingly ineffective. As pressures mount, we typically exert even more effort , and in doing so, we continue doing more of the same over and over again, and if it fails to produce the desired result, we try even harder and hope for a different result. Does this ring a bell as to Albert Einstein's definition of insanity?

What is happening in the marketplace?
We know that the mining industry, despite having plateaued, will continue to be central to this country's economy. However, we also have to acknowledge that potential business in this arena will be slower than previous years. In fact, a recent study by Deloitte on the expected global growth of industry sectors up to 2033 indicated a negative growth for the mining and construction industries of 3.24% and 3.25% below the Global Gross Domestic Product (GGDP) respectively. This puts the mining and construction industries among the bottom 25% of industry sectors in terms of estimated growth figures.
In contrast, the gas, tourism, agribusiness, health and international education sectors are among the top quarter  where growth is expected to be +10% above the GGDP.


This calls for some innovative thinking; we cannot continue focusing on the same industries and doing the same things we have done for the past decade.


We have to become innovative and be continually smarter (not cheaper) than our competition. However, the reality is that instead of becoming proactive, an alarming number of organisations view this as important, but secondary to their current business development and marketing efforts. Of equal concern is the amount of businesses where the "talk" is not "walked" in terms of communication to, and the engaging of employees in the process. Playing our "cards of the business" close to our chest, we fail to realise the immense opportunity that exists in leveraging off our employees in relation to the business strategy and the development of new business.


Folks, instead of battening down like most and doing "business as we are used to," now is the time to step out and start asking some bold questions about the approaching economic wave, the emerging industries that will take precedence in the years to come, and how your business and its people are aligned to take a hold of it.

Laying the foundation

Laying the foundation to serve as a launching pad for propelling the business into the future, senior management teams have to be able to answer specific questions and devise appropriate strategies for addressing them effectively. Do you know (not intuitively) what the actual strengths, weaknesses, opportunities and threats are in relation to your business and its people? Do you have clear-cut answers to the following questions?

• What is the degree of alignment of the business strategy with what is happening in the marketplace?
• What is the level of our people's actual involvement in, and taking ownership of the business and its marketing strategies?
• How well is the current business structure, systems and procedures aligned with our business objectives?
• What is the degree of balance between our inbound and our outbound marketing strategies?
• Are the current business values and the business culture conducive to realise our business objectives?
• How well have we captured the people's hearts and their minds?
• What is the internal and external customer experience?
• How ready and adaptable is the business and its people toward change initiatives?
• What are our people's occupational behaviour styles in terms of their preferred team roles (imperative for project management), their preferred leadership and subordinate styles (important to match leaders and their subordinates to achieve ultimate performance and productivity), and their preferred influencing styles (negation skills, winning new business, etc.)?

Many a change strategy and project having the best of intentions had failed as a result of senior management teams failing to recognise the importance of these key elements when embarking on new change initiatives and tracking their progress.

In Conclusion

The world of business has changed. For many willing to take the plunge and rethink their strategies of "business as usual" thereby laying a proper foundation to embark on a new and exciting journey of doing business, a bright future lies ahead.


Now is the ideal time for starting this journey and focus on those elements within the business where the highest return on your investment will be achieved. Start thinking outside of the box of "business as usual" and get answers to the questions above ... and use them wisely to propel your business into the future. There is so much more potential for growth in you business than you may currently realise!


Until next time!


Hein


Roth Associates

heinr@rothassociates.com.au