Category Archives for "Failure"

do not give up

Businesses Fail Through Lack of Confidence

We tell ourselves stories and sometimes we’re not aware we’re doing it.  Think of times you have contemplated a course of action and not taken it because it is too risky.  Right or wrong, you told yourself a story.  If you are not aware this is story, then how do you know whether it is true? These stories undermine confidence.

I’m not saying anything is possible but how do you know until you try?  Confidence is not solely being prepared to try, it is not being stopped by failure.  It’s the ability to pick yourself up and start over. 

Tenacity

Tenacity works when it is perceptive.  Attempting something that never works is probably not a good idea.  After any activity, ask yourself what went well.  What could have gone better?  Learn from mistakes.  Find out more about the barriers to your objective.  Apply what you learn to your next attempt. 

Remember, the biggest reason businesses fail is when the owner gives up. There are times when you have to conclude it is better to call it a day.  But usually, when you learn from experience, it is worth another try.

Consistency

Adapt your strategy to meet your learning but don’t forget why you are in business.  Your new strategy must be consistent with your business aims. 

People around you will offer advice.  Listen carefully.  Do they help you understand what went wrong or do they offer a solution to the problem, as they understand it?  Beware of solutions – they are often not what they seem.  Solutions, offered in a spirit of helpfulness, are rarely right for you or your business.

Ask why they think that solution would work.  Try to get to their analysis of the problem.  Then thank them and work out your approach, consistent with why you are in business. 

The Stories You Tell Yourself

“I am not the sort of person who …”   Maybe that is true for now.  But you need to see where your experience of failure points.  Repeated failure may mean you need to try things you genuinely believe are not right for you. 

Trust your subconscious mind.  You accumulate experience all the time and when faced with something new you are not keen to try, tell yourself a new story.  You could fail but equally, you may be on the brink of something new and exciting. 

The alternative is to give up.  That’s how businesses fail.  Draw inspiration from others in your field.  Their stories may help.  But beware!  Your heroes may not be as heroic as they appear.

Money exchanged for invoice

Your Pricing is Too Modest!

It’s tempting to reduce prices.  Reasons include low self-esteem, competitors with a large share of the market, customers who seek reductions on grounds of lack of funds or friendship. 

The rule of thumb is, if you think of changing prices, increase them. 

The Race to the Bottom

Perhaps prospects don’t buy and explain they can’t afford it.  Not having enough money is a great way to let you down gently.  We’ve all done it.  “Your offer is really great but I can’t afford it” sounds better than “I don’t like your offer”.

Then you find someone who turned you down on grounds of price has found money to pay someone else!  What does this mean?  Perhaps, you were not right for them.  Or perhaps you did not make an offer as irresistible as your competitor’s.

If you reduce prices, you might undercut competitors.  What if they respond by undercutting you?  This is called the race to the bottom.  Experienced competitors hold prices or increase them.  We need to understand why.

Cut prices and you need more customers to break even and more time for marketing.  Reduced prices are a prelude to going out of business.

Credibility

Another reason to resist price reduction is self-esteem.  Price tells your prospect how much you value yourself. 

Successful businesses increase prices for a reason.  They think about capacity.  When a business attracts many customers, providing a reliable and quality service is important.  The business also needs time for marketing.  Increased prices reduce demand and the business needs fewer customers.  Having a waiting list is no bad thing!

High prices communicate about your business.  They are part of your story.  If prospects want your services enough, they find the money.  Your challenge is to respect that and meet or exceed their expectations.

Pricing Tells a Story

Pricing opens up options for your business.  Your prices tell a story.  You need a range.  Always have one or more high-end offers and free stuff that captures interest, drawing people into your business as prospects.

In between, offer opportunities for prospects to try you out.  A coach might use workshops to engage interest.  This can be at a significant price but not huge; between £50 and a few hundred pounds.

If your basic price is high, you have room to make offers and not lose out.  These might be early bird offers or offers for those who are on your list or those who bring a friend.  So long as you have a good reason, you can make generous reductions. 

Consider using a workshop or low-end events to upsell to higher end offers.  If someone attends something, offer a reduced rate for higher end activities. 

With high end offers, you have scope to make reductions for customers where there is a good reason to do so.  This works where you have a good story!

A lot depends on confidence and so that is the next topic in this sequence about business failure.

four happy and one grumpy ball

Using Positioning to Market Your Business

We hear a great deal from politicians about competition.  They say competition is a driver of capitalism; competition provokes innovation.  To get one over on my competitors I must be cleverer.  I have to be more powerful, if I have more money I can take greater risks and outgun them.

In practice, this false worldview does not play out so much in armed warfare, where armaments are business cards, flyers and social media posts, as fear.  Fear of competition leads to stasis, you draw back from engaging in your market for fear of offending more powerful or experienced competitors.

Collaboration

Experienced business people know capitalism is rooted in collaboration.  Let’s start starry-eyed and then look at some issues.  It is easier to promote someone else’s business than it is your own.  Apart from thick-skinned individuals, most people find it easier to be generous than overtly confrontational.  Pooling knowledge leads to strategies that raise awareness of the need for your products and the range of solutions on offer.  This is a purpose of business networking, even though we sometimes lose sight of it.

The downside of collaboration is where businesses form cartels and work against the interests of their market.  Perhaps the most dangerous example is lobbying politians.  If you invest cash in lobbying, you can support cartels of interested parties.  Huge business interests bend political discourse through social media.  It may be one person’s investment, until you look closely and ask where they got the funds they invested.

Big business collaborates because they know collaboration works.  They compete in tacitly agreed ways.  The principle applies to small businesses too but they inhabit a different world, where opportunities for mischief are scaled down.

Positioning

Business is a force for good, especially at the local level, where they aim to produce something of value.  Whatever market you target, you find many other businesses competing for the attention of the same people.

Why should a prospect choose you and not one of the others?  There are three main ways to gain separation.  Once clear about what makes you distinctive, your position helps you collaborate for mutual benefit with others in similar markets.

Problem

The problem you solve is the most important positioning element.  How you describe the problem, its effects and the changes that happen when it is solved, matters.  Stories demonstrate the problem is real, how to know whether you have it, that it can be solved and why your solution is best for some people.

Your market determines the problem and understanding of the problem comes from study of your market.  If you notice a problem behind the problem, you demonstrate understanding of the issues your market faces.  But always your stories demonstrate understanding.

Demographics

Here you impose constraints on your market.  You might offer services primarily to women or to men.  Your market might be a particular age-group or locality.

You make choices for reasons of preference or convenience or to narrow your market.  Aim for the minimum viable market; that is the smallest number of people who can generate enough customers to make your business viable. 

Using demographics helps because you are in control.  Say you choose to market to women only.  You could decide that men are not ruled out.  This might mean you design your marketing solely for women but consider any men who express interest.  They are your secondary market.

Or it could be you choose women only.  At a later date as you grow in confidence, you are free to decide to extend your market to men.  They’re your rules!

Worldview

The final dimension is your worldview.  What might appeal to your market?  You could let it be known which way you voted for the EU referendum.  Maybe you don’t want to serve those who voted the other way.  Perhaps you want to convey a specific worldview that attracts a particular type of customer.  If the referendum is irrelevant, then don’t say anything about it.

Given 2 or more businesses with similar problems and demographics, how does a prospect choose between them?  Customers don’t always choose on experience or competence because businesses are often hard to tell apart on these factors.  Customers are drawn to someone they feel they will get on with.  Who at least understands their worldview. 

Innovation

The point is not to be like everyone else.  Your offer may be similar to many other peoples’.  You could redesign it but if you are successful, others will copy you.  If you are innovative in positioning, you have an advantage because others cannot be you.

By narrowing your market, you make space for others to position themselves relative to you.  Once all are confident in their positions, opportunities for collaboration by promoting understanding of a shared problem or available solutions become possible.

One common error, is to position on pricing.  This triggers the dreaded race to the bottom.

stone tower

How Lack of Persistence Fuels Failure

Businesses fail all the time.  How many fail through lack of persistence?

My father was self-employed as a sheet metal worker for about 30 years.  My goodness, he could have given up a thousand times over.  It was always difficult.  Not only did he have to find work (and that became progressively more difficult) but he also had to get his customers to pay.  The problem was everyone was waiting for the next person to pay.  As money entered the chain, it passed down the line.  There was no point in taking someone to court.  They would be made bankrupt and no-one would be paid.  The real problem was end-creditors such as the Inland Revenue. 

Neither Conservative nor Labour governments favoured small business owners.  My father, a life-long socialist, was the boss. When it came to disputes, he had no union to bat for him.

And yet he paid his way.  Brought up a family; I don’t remember wanting for anything.  He paid for my sister’s and my university education.  In the end ill-health defeated him.

What kept my father going?  He enjoyed his work and valued his independence.  He solved problems by creating solutions out of steel.

Consistency

Once you decide what your business is, it is important to be consistent.  You may be bored, your family may be bored, your employees may bored, your customers may be bored – it doesn’t matter, keep on keeping on – that is until your accountant (if you have one) gets excited and tells you it isn’t working.

Marketing and sales is a slog.  It is a necessary slog.  Unless you are a very peculiar person, marketing and sales are nowhere near as exciting as delivering whatever you deliver.  But if you give up, you have nothing to deliver.

When you start you’re not ready.  When you’re ready, your market is not ready – it all takes ages to get right.  In the meantime, you see other business owners motoring past with loads of work.  Don’t think for a moment they don’t have their own problems! 

Patience

Most things don’t work.  Finding something that does work and provides a reliable income takes time. It’s frustrating and there are no guarantees.

Patience is a virtue.  Those who stick with it are more likely to succeed than those who do not.  Even the most successful entrepreneurs had their wilderness years. 

How do businesses keep going?  It isn’t for the money.  They keep going because they enjoy what they do, can see the benefits they bring to others, create a body of work.  Business is an opportunity to try out new stuff and create something new. 

Promises of Great Wealth

Don’t listen to the stories of undreamed of wealth.  Yes it works out that way for some.  For most successful businesses its skin of the teeth, bringing up a family and getting through university before everything stalls.

We can’t all be millionaires and that is why we should steer clear of the big promises.  Remember the Pareto principle?  It means 20% of the market holds 80% of the wealth.  Yeah, you could be in the top 20%, you have a 1 in 5 chance. 

But there is room in the middle to make a niche that generates the income you need.  High end clients are not difficult to find and if you do, your niche can be comfortable.

Many who make large sums find they are not satisfied, for satisfaction is in the work.  What balance between work and income works for you?  If you’re not happy, you will find the money does not compensate.  So hold out for what is of value.

If you do that, you position yourself in a niche that works for you, with customers who appreciate what you distinctly offer.

Tug of war between computer screens

How Conflict Undermines Business and What to Do About It

Let’s start with Brexit!  Here is a rich source for understanding why most things don’t work.  Sometimes commentators talk about “groupthink”, although I haven’t heard it used of Brexit.  Groupthink is an unassailable shared truth no-one challenges.  It does not mean everyone agrees.  On the contrary, it generates divisions because the shared belief is false, there is no possibility of agreement.

There is no shortage of false beliefs in the Brexit debate.  But perhaps “the will of the people” is one particular.  Why so?  Well first, it is not the will of all the people.  If we accept the result of the referendum, it is the will of 52% of the people who voted.  17 million as opposed to 16 million, out of population of 60—70 million.  John Stuart Mill warned about the dictatorship of the majority.  It is always a hazard.

Worse is the practicalities of pinning down the will of the people.  Most people, myself included, are very bad at working out what we want about anything, let alone an issue as complex as Brexit.  We change our minds about stuff, all the time.   Representative democracies entrust decision making to informed politicians, accountable through voting.  It is decidedly not that people are stupid for voting the way they did. 

And actually we don’t know why people voted the way they did – on either side.  When people say the (small) majority all meant the same thing – there is no evidence they did.  And if they were such a coherent group of people, with a crystal clear understanding of all the issues and had the poll positions been reversed why should 16 million be less persuasive than 17?

The will of the people is a powerful debating tool, used to manipulate people on the other side of the debate.  Brexit repays study because conflict is one common reason businesses fail.  Perhaps freelancers don’t find this so much but even they can play a blinder from time to time.

How to Make Enemies

Come off it!  You are perfectly capable of making enemies without help from me.  Indeed there is a basic type of non-directive consultancy called a case.  A case is where someone triggers conflict and needs help to resolve it, so the whole community can move on.

Any community entrenched in dispute ties up energy.  Businesses are vulnerable and so are community groups, schools or churches.  Very often shared assumptions create division and it is a painstaking task to track back and work out what they are, let alone how to resolve them. 

Managing Other Peoples’ Conflict

People trained in mediation may be able to help.  But pity the poor manager, minister of religion or headteacher who enters a situation where there is entrenched conflict.  They might see where shared erroneous beliefs lie but what are they to do?

The worst thing they can do is plough on regardless.

Tasks and Issues

“Tasks and issues” is a useful tool.  To assess a situation, make two lists.

The first is a list of tasks, things that need to be done.  Start these with the word “To”: To

  • move the font to the left of the pulpit.
  • improve performance on phonics in Year 3.
  • start a Facebook advertising campaign.

So far so familiar.  The second list is for issues.  These begin with words such as “conflict between” or “disagreement between”:

  • Conflict between those who want to move the font and those who have to apply for a faculty, remembering what happened last time.
  • Disagreement between Year 3 staff about the best way to improve performance.
  • Conflict between staff who want to use social media for marketing and those who point to the proven success of traditional marketing methods.

These are examples from different organisations.  Your lists will be from a single organisation.  The key question is: do you have issues likely to prevent, delay or subvert your tasks?  If so, how serious are they? 

If possible, address the issue before the task.  Ploughing on with a task when there are powerful groups opposed is a recipe for failure.  On paper this may seem obvious.  But it isn’t obvious because if it were, people would do it!

We have seen this played out in the Brexit debate.  The closeness of the referendum debate matters.  And up to the time of writing it has been ignored.  My prediction is the nation cannot move forward until the issue is resolved.  You can’t ignore such a close result.

People are more likely to be interested in tasks than issues.  The temptation when facing opposition is to pack it in.  And that’s another reason for failure – lack of patience.

disused car with flowers in the engine

What You Do and Why You Do It

A few years ago, I started in business not at all clear about what I was going to do.  I was clear about why I wanted to be in business.  My business why has never changed, even though several people have told me it’s no good!  I’m convinced why you do business is crucial for success.

I looked back to my time as a development worker and realised something true for me and many other development workers.  Most of our projects no longer exist.  Some were successful at the time.  Now they are no more and the communities we sought to change are unchanged or worse off.

I concluded the reason for this was not quality of the work so much as funding.  Grant aid is not sustainable.  Thriving communities form around businesses that serve local residents.  My vision is of business as a means to local transformation.  I aim to coach in local marketing, businesses mindful of their impact on the lives of those around them.

I found when I spoke of this aim, audiences were always inspired.  My challenge was to turn this why into business activities.

In an earlier post, I suggested you need three aims for your business: your business, financial and lifestyle aims.  In this post I return to the first of these. 

Why versus What

It is worth reading Simon Sinek’s book, Start with Why.  He explains why knowing the reason your business exists is important for success.  People buy why you do your business, not what you sell.

Look at it this way.  You offer something similar to many other businesses.  Even if you come up with something completely new, you will be copied.  Assume your competitors are as good as you are or even better!  What does this mean?

You could argue it’s best to hand your customers over to someone who is better than you because the public always chooses the best offer on the market.  You could compete on price – I may not be as good as the others but I charge less!

Let’s say you’re one of three people equally good at what you do.  Each is invited to pitch their business.  How will your audience choose?  Telling them what you do won’t help them decide. 

Telling them why you do it, offers them a choice.  They won’t all choose you.  Whatever turns one person on, switches someone else off.   But that’s OK, you’ve helped them decide. 

And who says the other business is better than yours?  When you help the people who choose you, they and you are happy.

Forgetting Why You Started

What you do is seductive.  You spend years honing your skills and you are proud of your achievements  You know you help people but somehow you can’t reach them.  They show no interest. 

You spend a lot of time designing better products and services.  This is productive, if part of routine housekeeping.  But don’t lose sight of your reason for being in business.  It should drive design of products and services and inform marketing. 

Don’t lose sight of why you started.  Maybe you need to persist with the packages you started with.  It is tempting to move on and abandon old ideas.  But if you chop and change, it makes it difficult for your market to remember you.  People need to hear your message many times before they take it on board.

Stay with your why.  Eventually people remember you and so turn to you. 

Failing Through Success

Which just about says it all except …

Success can undermine your why.  Most small businesses make a living from early adopters.   Their niche market makes enough money and they enjoy the work.

Some businesses make the breakthrough to the big time.  They grow into premises and staff and loads of customers.  It is possible to lose sight of your why when this happens. But remember it is still the reason people choose to become your customers.  If you lose track of your why, your customers will move on.

One business that has maintained clarity about its why is John Lewis.  Think of its Christmas commercials.  Do they lead to more customers?  There’s no way of knowing.  What they do is remind staff, customers and shareholders of their why.  They use their marketing to build their business.

It’s tempting is allow your what to overwhelm your why.  Many people don’t make the distinction, they don’t understand why your why is important.  In time, this means your why does not hold your business together and multiple whats polarise your stakeholders.  Conflict creates enormous problems and so it is the topic for next time.

Do you know why you are in business? How does it help you market and sell your products and services? Leave a comment below.

view of skyscraper from below

Your Worldview and Your Business Plan

In 1980, I packed in research science and elected for life as a development worker.  The biggest stumbling block to this new life was my worldview.  I was an extremely introverted young man and my new career depended on my ability to not only relate to people but take initiative.  Also, my general views about how things worked were hardly realistic.  I had a lot to learn. 

Community development is tough.  Over the years I saw many new workers crash and burn.  I have no idea how I survived.  Certainly, it took me well over fifteen years to understand what I was doing.  For one thing I had to stop blaming myself for failure.  It was sometimes my fault when something went wrong but well … most things don’t work. 

Most important I had to learn to trust other people and offer them space to make their own mistakes.  Funding regimes make terrible demands on people who are not being paid to manage projects and paid staff.  I slowly understood it is our worldviews that erect barriers to success.

Personality

It is worth starting with a word about personality.  We act out of the ways in which we perceive the world.  This is why people with similar views may respond in very different ways.  Knowing your own personality type helps you understand personal biases.  Once you know your type, read descriptions and watch out for those biases in the way you act. 

I favour The Enneagram, which is a system of 9 basic types that interact in various clearly defined ways.  You identify your type by observing your behaviour and comparing it with descriptions.  This is a slower but ultimately more reliable than using questionnaires.  You can find help from experienced practitioners and if you get the opportunity to meet with others of your type, you can check out whether you do comfortably fit in the same mould.

The point is you cannot change your type.  All have positive and negative characteristics.  They can all be healthy or unhealthy.  You become healthier by observation of your own behaviour and focusing on well-defined positive changes.

One reason most things don’t work is something devised by someone of one type may not function in the same way with someone of a different type.  You can adapt but if you are unaware of your own biases, it is unlikely you see the weaknesses in your own approach. 

Technical and Adaptive Solutions

Personality has a massive impact on worldview.  All nine personality types share all possible worldviews.  The reasons they hold the views vary.  For example, an Eight might support Remain in Europe because they believe the UK can best achieve its aims by throwing its weight around in Europe, whilst a Five might devise a detailed reasoned argument for the same cause.  And of course others of the same types might hold the opposite view. 

From a business perspective, all types will be drawn to congenial technical solutions.  Faced with a problem, people seek a solution and they most likely choose something where they feel comfortable.  So, the Eight may feel happy cold calling prospects whilst the Five is unlikely to feel comfortable doing so.

However, nine different takes on cold calling prospects does not tell us whether cold calling is a good business method.  Granted those who feel most at ease with the method are likely to use it more effectively.  But what if it is the best method?  Does that mean everyone must use it, whatever their predisposition?

Any proven method is worth consideration.  Personality is one factor to consider.  However, there are many ways to solve the same problem.  Choosing the right technical solution is an important skill, resisting biase from your personality and worldview. 

Seek an adaptive solution to the problem.  This allows you to construct a tailored response, something new that works for you in this context.  

Coaching Helps You See Things Differently

This is why working with a coach help.  Especially so if the coach does not share your personality type.  The coach can challenge you to think outside of your habitual worldview.    They suggest other ways of looking at the problem and point out where you act out of your prejudices. 

The aim in the coaching relationship is to engage in a dialogue.  There is no reason the coach is likely to be less biased than you are – they see from their perspective.  However, you as client can challenge the coach too.  You can say why you don’t think their suggestion will work. Together you seek a solution that works.

But none of this can work until you have clarity about why you are in business in the first place.

woman breathing at sunset

Getting Your Business Purpose Clear

When I first became self-employed, I had no business purpose.  It has taken me several years to find one.  So, why did I become self-employed?  I was attracted by the lifestyle and no longer wanted to work for someone. Could I use my days the way I chose? 

I needed a business purpose because I’d never be happy simply living from day to day without purpose.  What would get me out of bed in the morning and help me build new contacts? 

I knew I could live off savings but I needed income and so found I had another aim for my business.  As I worked on this aim, there was more to it than setting a financial target. 

Three Aims

From my own experience, I saw three aims together define my business.  For some the aim of their business is to make money.  But money is never the reason a business exists.  A business that defines its aims solely in financial terms lacks credibility.  There is financial sense in defining three aims that together define your purpose. 

“Profit is no more the purpose of business than breathing is the purpose of life.”

John Kay, a contemporary economist

This helps us identify two business aims:

Business Purpose

This answers the question: “Why are you in business?”  This is an immense topic and it is covered in Simon Sinek’s classic work “Start with Why”.

Once you are clear about why you are in business, you can discern what is relevant.  If you define your business by what you do, what you do constrains your activities.  If you make computers, you can’t make mobile phones.  If you aim to help people communicate, it helps you open new ways to meet that why – now you can make computers and mobile phones!

Your business is easier to understand and more attractive to your target market.  Indeed, you have no hope of attaining your financial target without your business purpose.  People need to know, like and trust your business if they are to buy from you.  

It doesn’t matter whether you see your business purpose as more or less important than your financial purpose, you need both!

Financial Purpose

This is not solely about setting a target, so long as you understand it may take several attempts over several years to get there.

The other part of your financial purpose is how do you plan to get there?  For example, a business during its early stages usually needs to maximise sales, while a business further down the road may need to maximise profit. How you understand your financial activity makes a massive difference.  You approach sales and profit in different ways. 

Remember John Kay.  Finance is essential to your business but it is not the reason your business exists. 

Lifestyle Purpose

A third dimension, often overlooked, is still important.  What do you want from your business?  This might include provision for yourself and your family, freedom, health …

This purpose influences the other two.  Here are a few reasons:

  • Direct impact upon your financial purpose.  If you want to travel the world for 3 months every year, that has financial implications for your business and impacts on your business purpose.
  • The demands the business makes on you.  Do you really want to find time to manage staff? 
  • The demands your lifestyle makes on your business.  Can you afford to take 2-3 hours per day out of your business for other activities? 
  • The exit strategy for your business.  Do you have an age you ideally want to work until and what happens after that?

Some of the demands life makes are massive.  Caring for children or others takes time.  If your business has to work around these commitments, it will be different to what it otherwise would be. 

Some people continue in full-time or part-time work as they develop their own business.  At what stage do they let go of their safety net?

Clarity

Businesses are prone to failure where they lack clarity about one or more of these three. The point where the three purposes overlap is where you need to be.  For example, if you have unavoidable childcare commitments, then you have less time to spend on your business.  Therefore you need activities, compliant with your business purpose, which maximise income for least effort.  This may mean compromising your business purpose or accepting lower financial returns.

Sometimes there are other options.  Deciding what to do in changing circumstances is best when guided by your three aims.  The decisions you make can be guided by these aims but you are also subject to something else. 

Your worldview determines the decisions you make and if you are not aware of its important role, it can be another reason for failure.

house overgrown with ivy

Understanding Context and Failure

Saul Alinsky was a community activist in the United States.  He invented Citizens’ Organising and after he died in the 70s, the Industrial Areas Foundation led the way.  Organising has been immensely successful in the context of the US.  President Obama was an organiser before he became President.

Attempts have been made to introduce Organising to the UK.  Not with a great deal of success.  One of the earliest UK Organisations was COGB – Citizens Organised for a Greater Bristol.  I saw one of their events in 1992, when I took an organising course.  The event was impressive.  (I failed the course because I didn’t get angry enough!) 

Impact was the Organisation in Sheffield.  It no longer exists.  Why?  I don’t know the details but I know what I experienced of Impact.  Funding is important for Organisations and it must come from their members (other organisations – in the States, often churches).  Impact applied for grants and this put it in the wrong relationship with potential members and allies.  It was perceived as competing for funding and to achieve its outputs it tended to strongarm the groups it was supposed to support.  Presumably the reason it applied for grants was because most organisations, themselves dependent on grants, could not justify its high fees.

Organising hasn’t worked in the UK because it is a completely different context to the US. 

Divergent Solutions

Context is one key reason proven approaches don’t work.  Time and again, I heard about some new initiative in a neighbourhood similar to the one where I worked.  I persuaded people it was worth a try and we found it didn’t work.  Often some apparently insignificant issue proved all important.

We tend to think of solutions as convergent and the analogy might be engineering.  Think of something that always works, eg a car engine.  A well-maintained engine works reliably and predictably.  It may be possible to modify the engine and improve performance.  If this is a positive change, it is not too difficult to persuade everyone that it’s worth adopting the modification.  Solutions for engineering problems are usually convergent.  Given two solutions, it is not difficult to agree which is the best.

Divergent solutions are where answers proliferate.  Unlike convergent solutions, where potential solutions can be eliminated, divergent solutions produce more and more options.  Most human systems are divergent.  There are at least as many solutions as there are people involved.  These are qualitative systems, described by stories – they cannot be described by statistics.  When there are effectively an infinity of possible solutions, the only way to manage is to make choices.

Trial and error is the main option here.  But can we guide the choices we make?

Soft Systems Analysis

Soft systems analysis helps us think about divergent problems.  It is too complex to describe the full method here but I can help you appreciate something of its power.

What tends to happen with any divergent problem is we lose sight of what we are looking at!  The situation is so complex we can’t tell apples from oranges.  Indeed we might not see the oranges at all because there are so many apples, all vying for attention.

When we take a soft system seriously there are many problems and many solutions.  Before we do anything, we need to agree on the problem.

One useful idea is the distinction between actors and clients.  An actor is someone who has a part to play in the system.  There are likely to be many actors and all have their own roles and objectives.

A client is an actor who wants to change the system.  Each client has their own perspective on the system.  So, what difference does it make, which actor you choose as a client?  (These may be real-life clients and you are helping them with their analysis; or you can choose several actors and compare the difference it makes when they are clients.) 

Let’s say you consider three actors as clients.  Each perceives the system in their unique way.  So, now you see the system from three distinct viewpoints.  This helps you see new problems and new possibilities. 

The context changes when you change client.  The system is unchanged except you view the system from the perspective of  each client. 

Why do most initiatives go wrong?  The reasons can be subtle.  There’s nothing visible but opposition to your solution grows, it seems out of nowhere.  You need to be able to read the system and soft systems helps you do that.

Each client has a purpose.  You can help a real life client achieve their purpose using soft systems.  You can view a system from the viewpoints of several clients using soft systems.  Either way you need to understand purpose.  And lack of clarity about purpose is another reason for failure.

Never stop dreaming

Why Does Business Development Matter?

When I started my own business, I had no idea what I was going to do.  I knew I had no idea; what attracted me was lifestyle.  I wanted freedom to live my life as I chose.  I was at the earliest stage of business development.

So, I started as a website designer.  It’s been a journey, working out what I do – what I offer that people value. 

As I grew in understanding of website design, I worked out websites are always about marketing something, if not a business, a cause.  As I read about marketing I found much of it familiar from my time in community development.  We didn’t call it marketing.  When you have no funds and little influence, you need to communicate your message and respond to objections.

The next phase was to position myself amongst others who sell marketing.  Any viable business encounters competition.  I chose storytelling in marketing as a key area based on my experience in community development and my observations about how marketing is itself marketed.

It has been a long journey and a journey every business owner takes.

Why do most things fail?  The most likely reason is covered in this post.  It is important to understand the stage of business development you are at.  Not every technical fix works for businesses at every stage of development. 

A common problem is using methods that work for businesses at later stages.  It is also possible to be stuck with a method that worked when your business was at an earlier stage.

Five Stages of Business Development

Let’s review five stages of business development.  Five is not a magic number.  Five offers a helpful rule of thumb.  It is always possible to go deeper if you need to.

Stage 1: Dreaming

At this stage, you work out your business purpose.  Why are you in business?  Use trial and error.  Try things until you find something that works.

This stage can be swift or slow (years slow).  Sometimes it takes a while to work out not just your strengths but what you can meet from your market’s needs.

You can make money at this stage and indeed you must be in business.  How else can you test an idea to see whether it is viable?

Once you turn over a few thousand a year, you are ready to move to stage 2.

Stage 2: Marketing and Selling

At this stage you work out how to market and sell products and services.  If you cannot sell over a cup of coffee, you cannot sell online.  You need to know, through conversations with potential customers, what sells; work out how to get them to sit down with you over coffee.

Move to stage 3 when you feel under pressure to meet the demands of your customers.  By then you may be turning over a few tens of thousands.

Stage 3: Capacity Building

This is the stage most successful businesses reach.  Some pass through this stage with an eye to stages 4 and 5.  Others are content at stage 2 but wish to perhaps find more time by becoming more efficient.  This is not the place to go into detail but the main ways to build capacity are:

  • Automation – now you can sell online!
  • Increased prices
  • Buying in services
  • Employment of staff

Many use all four and so likely turnover is intermediate tens of thousands, up to the UK VAT threshold, perhaps. 

Stage 4: Mass Market

This is where you move out of your niche and build a mass market.  Whilst you must remain faithful to your business purpose (success is a frequent reason businesses lose their way) now you sell something with mass appeal.  You offer any flavour so long as it is vanilla.

This stage does not appeal to everyone. 

Stage 5: Guru Status

Now you sell more than one line to a mass market.  You are recognised by other businesses as the leader in the market. 

Reasons for Failure

Stage of business development is a frequent reason for failure because there are many ways of losing track of where you are.  Here are a few.

First, you leapfrog to a later stage.  This is a frequent issue for people starting out.  They are new to the marketplace and watch what others do.  Everyone’s going to a workshop about Facebook marketing and so you tag along.  It’ll work if you have something to sell and Facebook is right for your market.  If you don’t, maybe you are getting into Facebook too early. 

Another common problem is early success.  You can leapfrog stages 1 and 2 and go directly to 3.  This might happen where someone stumbles on something easy to sell.  They set up a business and it does well, requires loads of staff and shows great growth.  But what happens when demand falls? Now you have the responsibility of employing staff but no clear business purpose and no idea how to market or sell anything else. 

It is also possible to forget stages 1 and 2, if you are contemplating a move to stage 4.  The temptation at this stage is to compromise on quality.  Does compromise further your business purpose? 

Finding Solutions

My purpose in this series of posts is to identify likely reasons for failure.  It is not to suggest solutions.  Why? Every business is different.  What works for one business is a disaster for another. 

What can you do?  It helps to begin with two questions:

  1. How well do you know your own business?
  2. Do you know the stage of development your business is at? Whatever the reason for failure, it is coloured by the stage of business development. 

Coaching

Get a coach or non-directive consultant.  A good coach not only boosts your brain power (two heads are better than one!) but sees your business from a different perspective.  It is easy to get locked into one way of seeing things.  Tell yourself a story and the story enchants you.  Sometimes the perspective you take has obvious flaws; obvious when they are pointed out! 

A coach helps you find the perspective to move your work on.  For this reason, the coach need not be an expert in the business you occupy.  You need to be nudged, you don’t need someone to do the work for you!

Technical Solutions

Technical solutions are great so long as you choose the right ones.  For example, Facebook marketing might be the solution you seek.  It’s a proven method.  Go to a workshop on this topic and you find other business owners there too.  They’re there because it is a good, proven method.

Spend no more time on Facebook marketing than you need to eliminate it from your enquiries.  Putting time, money and energy into the wrong solution destroys your business.  If Facebook marketing destroys your business, it is not the fault of Facebook marketing.

Most likely, it is not appropriate to your stage of business development.  There may be other reasons it does not work.  But consider whether what you are trying to do right now is best helped by marketing through Facebook.

Conclusion

Stage of business development is an important element in the context of failure.  But businesses fail for other reasons and it is important to understand how context influences the solutions we bring to our business.