This article was written by Ed Hatton for Entrepreneur Magazine (South African edition), as the My Mentor column published in February 2016 and is posted here by their kind permission
Why so many strategies fail to deliver and what can be done about it
It is almost a caricature. The executives go away on a strategy planning weekend. They have a successful think tank and come back fired up with great strategies and enormous enthusiasm. Then the day-to-day tasks demand attention and three months later nothing has changed. The idea may still be discussed in management meetings but this is becoming embarrassing. Why did it all go wrong?
It is a lot easier to think about how to grasp opportunities and solve problems than it is to implement the plans. A central problem of implementing new strategy is that it usually relies on people who already have busy jobs with little time or energy to execute additional demanding tasks. The planning session seldom takes this factor into account so strategy implementation remains project-based and dependant on spare time availability within the busy management team. Nothing changes and the company drifts on as it always has.
The style of many entrepreneurs may also be the root cause behind failure to implement strategy. The phrase ‘working in your business instead of on your business’ is almost universal. Entrepreneurs naturally fix problems, manage people on a daily basis, sell, manage the finances, pacify irate customers and liaise with suppliers because they have always done so, and are now very good at these tasks. They work long hours doing things that others would be less effective at doing. Working in the business becomes a comfort zone, and the area they gravitate to when the business faces problems. Continue reading
This article was written by Ed Hatton for Entrepreneur Magazine (South African edition), as the My Mentor column published in June 2015 and is posted here by their kind permission
Does unique mean it will make millions for you?
You have created an innovation; congratulations. It may be a unique product, a brand new service, a new way of distributing things, a unique business model or a combination of these – but will it fly? Hopefully it will be a success and reward you, but just because it is unique is no guarantee of commercial success. The great innovations are generally those where potential customers immediately see the value, and perceive the value to be higher than the cost. Think of prepaid airtime which opened cell phone use to those who could not afford a contract.
Innovations which struggle to get off the ground are often those where the entrepreneur is passionate about it and believes potential customers should share his or her passion. This is a good way to learn that even great and creative products must be sold. Many wonderful innovations have never been launched or failed when they were introduced.
Preparing to launch
Ask yourself: Is this innovation is in response to a real market need, does the market recognise this need or are they not aware of it yet. If you are in the second category be prepared to spend a lot of time and money convincing people they really have this need.
There are two key requirements for a successful launch of a unique product; reasonable certainty that customers will buy at the proposed price and sufficient money to develop and market the innovation. Please do not ignore the marketing costs. Commercial failure of many innovations stemmed from entrepreneurs who spent all their money on perfecting the product and had nothing left to tell the market about it. Marketing innovations is expensive; the market must be convinced that the innovation works, is cost effective and gives advantages over old ways of doing things. Do not underestimate marketing costs. Continue reading
You have spent time putting together a great business plan, don’t waste it
It takes time thought and money to put together a credible business plan. You may have needed one to get finance, or to get suppliers to support you, or because you believe that planning your business is the right way to go, which is the best reason. Now the plan is complete, it has goals, targets and projections, mission and vision, marketing promotions, organograms, staff recruitment and training plans, financial projections and all the other characteristics of a great business plan – so what now?
Sadly in even the best intentioned businesses the day to day activities of running the business, and as all that great work fades from memory the plan document remains in a file, never to be looked at aside from out of nostalgia. If this is done deliberately it can be a good strategy, especially if you follow Eisenhower’s motto that “Plans are nothing, planning is everything.” In this strategy the business recognises that merely developing a plan drives the business to more focused and effective actions, but the entrepreneur wants freedom to react to situations on the ground, rather than stringently following the plan. If this is so in your business I have no problem at all.
However if your business is like the majority, the great ideas and lofty goals set down in the plan will slowly be submerged in the sea of day to day tactical management, and very few of the goals of the plan will be met. If this is you, or if you are in a planning cycle and fear this very widespread problem then read on… Continue reading