The recent pandemic was a strong signal for change, and I see most of you entrepreneurs and business owners responding to the business changes required and new opportunities presented.
Of course, no business wants to be the next Blockbuster, which kept charging straight ahead despite subtle clues that the internet was changing everything. While you all recognize that reacting to weak market signals is critical to staying in business and staying competitive, I find that many don't have the skills and focus to trigger change decisions on a timely basis.
Here are some key strategies that I recommend, to prompt you when changes to your business may be required.
1. Look for a changing customer sense of value.
For example, I find that more people now look for a great total experience, including selection choices, ease of return, and friendly support, versus just the lowest-cost transaction. You may be getting killed today by customer expectations you never worried about just a few years ago.
2. Scan for unmet needs to match new products.
New technologies drive the need for support and attachments, which could be your opportunity or loss. When sales fall off, you need to dig deep for the "why," rather than just assuming the price needs to go down. Make sure you think creatively to add as many new items as you phase out old ones.
3. Don't dismiss any new thing as a "flash in the pan."
Often new competitors do fail, but they may highlight a consumer trend that you can capitalize on now, before it comes back to haunt you later. It may be time to start your own home delivery service, or subscription offering, or time to acquire a struggling competitor to scale your business.
4. Proactively evaluate new technologies for impact.
Just like Blockbuster should have recognized the Internet as a potential impact, it's your job to look ahead in your industry. If you wait for a crisis, it may be too late to recover, or the impact is large. An example is the transportation industry moving to electric; key player positions are changing rapidly.
5. Establish and evaluate metrics at multiple levels.
In addition to total sales, you need to look at categories and trends at lower levels. These are where you are likely to see weak signals of change that you must react to quickly. As times change, you may need new metrics, such as total experience, website hits, and social media complaints.
6. List potential new opportunities outside your domain.
A smart business owner always maintains a list of the top five current and future areas that may be ripe for growth, and has one or two experiments going. A good way to start this activity is to participate in industry conferences, and build relationships with peers and other leaders.
7. Investigate broader implications of disruptive events.
It's easy to see the immediate impact of disruptive events, such as the pandemic or big political changes, but only a few foresee the probable financial impacts and new regulations. Be a first responder, rather than the last, to make business model and strategy adjustments to compensate.
8. Trust your intuition and team input as weak signals.
As an experienced professional, you should realize that running a business is more than data. Sometimes premonitions are real, especially if backed up by employee and customer input. I look for business owners that have confidence in their insights, as well as supportive data and teams.
I have found that today new entrepreneurs are much more likely to respond to changes in the marketplace, especially weak ones. Even from these, as they morph into mature business owners, I see less and less focus on the need to read the market, and respond in a timely and competitive fashion.
Now is the time to take a hard look at your own operation. If you aren't identifying weak signals in your weekly strategy sessions, and making changes equally often, you are likely losing ground in the struggle between long-term success and failure. We need your urgency and creativity.