Spring forward -- or you'll fail fast
(MoneyWatch) Ah, spring...A time of renewal, re-awakening, re-birth. It's the time of year when we park our parkas, open our windows to the fresh air and breathe in the promise of the new season.
For business owners, it's the perfect time to open our eyes to new possibilities with and within our businesses.
Go for a Walk
Intel (INTC) made $182 million in profit in 1984. The following year, profit plummeted by $180 million to $2 million. The legendary Andy Grove was president and Gordon Moore was the CEO. They knew they were in serious trouble.
As they were pondering what to do, Grove asked Moore a question that changed everything. If the board of directors were to fire us tomorrow and bring in a new CEO, what would the new CEO do? Gordon replied, "He'd get out of the business we're in. It's time to change what we're doing." Grove responded: "Let's go for a walk, then come back in the door as if we are the new CEO and president and look at our company, logically, and see where to take it."
So that's what they did. And the rest is history. Intel went from chips to processors. That brief conversation changed the direction of Intel, which remains as one of the worlds largest and most admired companies.
What if you were to walk out the door of your company and come back as the new CEO? What would you see if you were to look at your company through fresh eyes like Grove and Moore did?
Grow your Garden
Your business is alive, and like every other living organism, if it stagnates it decays. If it continues to decay, it dies. Growth is not optional: it's a business imperative.
Growth is not just about getting bigger. We need to look no farther than the obesity epidemic in the U.S. to see that bigger is not always a good thing. Growth is about getting better: Delivering greater value to more people. The most successful, sustainable companies grow their communities of customers, vendors, employees and strategic partners. Apple (AAPL) became the most valuable company on the planet not just by selling more but also by creating more.
Hope May Spring Eternal but Successful Businesses Fail Fast
Success is about repeating what works. Failure is about repeating what does NOT work. The stop doing can be just as important as the start doing.
For those of us that didn't meet Mr. or Ms. Right on your very first date, you know what we mean.
The trick is to learn from what isn't working and to do it quickly. Every company will experience its share of false starts, sunset products or just down right flops. As Intel discovered, it is the decisions made under these circumstances that ultimately determine the business' success.
Equally important is how soon the decisions are made. Sustainable companies learn to fail fast. Regardless of their size, they are able to maintain their agility. Even Bank of America (BAC) and Netflix (NFLX) changed course after making potentially disastrous decisions.
The best way we know to do this is to draft the business equivalent of a prenuptial agreement. Create both the "if then" and the "by when" before you get emotionally and financially invested. If those clearly defined milestones are not met, then pull the trigger on your exit plan. Milestones can include breakeven points, market penetration goals, burn rate and all other manners of goals.
If you employ this "pre-nuptial" approach, it can eliminate the emotion from potentially difficult decisions. From startup to Fortune 100, every company operates with limited resources. The decimal points vary but the math remains. The greatest challenge of every business is resource management -- where, when and how to focus people, time and money.
Snow is Melting and the Road is Clear
Every winter we get stuck in the snow. Even with snow tires and chains. We just can't seem to get traction.
Now is the time to hit the road. The economic freeze has melted. We no longer need to spin our tires in recessionary muck. As we're digging out, we must remember that the long, cold winter of the last several years has changed our landscape.
Now is truly the time to focus on creating the future, not fixing the past.
How can you do this?
Well, start by simply taking a walk.
Photo courtesy of Flickr user brianfuller6385