Are you ready to change?  The reason most successful businesses don’t survive is usually quoted as cash flow problems.  But really isn’t that the eventual outcome of almost any bad decisions or management?  The reason for the loss of cash flow is what we need to learn.  Even big companies like Kodak and General Motors who had lots of cash available to them for many, many years fail because of bleeding balance sheets and more outflow than income.  That is like asking why did the stock market go down?  Answer: Because there were more sellers than buyers!  What is there to learn from that if we don’t dig deeper to find out why?  Not all the answers come from the accountant and if you take the time to study human nature you might find that you don’t need numbers quite as much as you might think.  For instance, just knowing what our human tendency is when we have a string of successes is worth a lot of numbers.  Most amateurs that win big in the stock market turn around and loose it again and most big companies find it very hard to change.

So many of the business failures over the years come from an unwillingness to change and innovate.  Even when the numbers are there screaming that you need to!  Kodak and General Motors had enormous market share for years but before they lost market share and went bankrupt their profits began to dwindle.  There are usually lots of red flags before a crash not just one.  It is like the chain of events that leads to a crash.  It is a chain or series of events with lots of links rather than one big one and that means we are building on bad choices (or vices depending on how you look at it).  The rule in an accident investigation is that by removing one link in the chain of events that lead to a crash you can avoid a crash.  Just one bad habit or bad decision removed and your business can avoid a crash.  Just one, not all of them!  Of course you wouldn’t want to stop there but think of finding one reason that your business might fail and fix it. 

OK, how about being unwilling to change.  Markets and people and economies and governments change and no one is safe from it!  Start looking for old ways of doing things in your business that haven’t changed and see if there might be an opportunity there.  If you think about ways that your business or industry has become stagnant you might improve your business before bad news ever shows up in the numbers.  It is a little like that early morning workout, the older you get the harder it is to get started but you are always glad when you do!

For most business professionals there is never enough time to get everything done in a day.  So most days become a series of compromises on how to allocate their resources, time and attention.  There has to be an eye on the future and yet the present is always demanding more.  The key to allocating attention to the vital preparation for tomorrows challenges is to get the mind clear of today and get into a state of creative calm without jeopardizing the business of the day.  How can you do that?  The opportunity for innovation is completely worthless if there is no time and energy left to allocate.  With every new endeavor that we give ourselves to we will have to eliminate something from our schedule, there is simply no way around it.  So, instead of trying to just cram more into our lives we need to embrace the opportunity to eliminate something of lesser value.  Allocating resources is always going to be one of the biggest challenges in our personal and business life.  It is not like we can just grab that 15 minute gap in our schedule and do some deep thinking in a hurry.  One step in the right direction is to be consistent with the day and time we set aside for that deep contemplation every week.  Our minds do tend to recognize patterns and habits and before long our mind is subconsciously preparing for that time we cut out of our schedule every week and when we get there we can hit the ground running. 

Knowing what to eliminate from our schedule in order to make room for that deep innovative reflective time is an art form.  After all isn’t everything we do in our business week vital to the survival of our businesses?  Actually most successful companies have had to abandon/eliminate lots of things and get good at it.  Usually, we have a list of priorities and even though most if not all of our duties might be necessary we can usually determine which ones we can do better than anyone else and the rest can be delegated or eliminated.   The more we grow the more we will need to single out what we really do best in a step by step process.  It is really a good exercise and will help you clean out the fluff and the good and replace it with the better.  Isn’t that what innovation is all about? 

There is no question that the number of communication methods are exploding.  From twitter to texting there are more inexpensive and efficient ways to get your message out than ever before.  It is hard to believe that 15 to 20 years ago the cost of a long distance phone call was something you actually had to stop and think about.  Voice was the only thing available to you if you wanted to communicate with someone outside your living room.  In many ways some of the new methods of communication are hard to beat.  However, it might be the plethora of new communication mechanisms that makes some of the old things become new.   So, even though the voice part of a telephone has been around for over a century it is not dead yet and might even be one of your greatest brand building tools. 

But, how can a device that is over a century old be an innovation?   Well, it is not the device that is the innovation but the unique use of it.  I know that talking on the phone and not texting is not new but when you see that there are more text messages sent than there are voice you begin to see that voice has become more rare.  Rare is in many ways is more valuable than plenty.  There are plenty of companies that have outsourced their phone banks to other countries with lower wage rates and plenty that have you talk to a robot but it is now (not 15 years ago) rare to talk to a pleasant voice of a local person who understands you.  Now I don’t want to say that those other methods are necessarily wrong but rather a choice and all choices have consequences. 

I certainly know of a few businesses that would actually thrive if they would do something as simple as “Just pick up the phone!”  One of them being the construction industry (but that is another story).  And then there are those that really are thriving because they believe texting and messaging and robots can never create human connection, like Zappos.com.  We still like to do business with people and especially with people we like.  People are fascinating to us even if it is just in a voice conversation on the phone.  I actually made a call to Zappos, (the very successful online shoe /apparel store) and was pleasantly surprised by the cheerful, upbeat voice of Mo!  Mo was this friendly helpful person that immediately made me feel a connection with the company, not just their shoes, and more likely to call back and do business with her (um, I mean Zappos).   And that is just it, Zappos is now a person not a company or a name.  It seems that Zappos might believe at least in part that brand loyalty is made with voice and touch not just text, website content and flashy advertising.  That might be why, according to Mo, even “CEO Tony” answers the phone during holidays and rush hours!

What a novel and innovative way to work with customers!  Remember innovation doesn’t have to be a new invention it can just be a re-invention. 

What if you had to measure the success of your business without using money, how would you do it?  Obviously we need to make a profit to stay in business but we can be profitable by dumb luck or by living off past success and this doesn’t do anything to help us determine whether we are doing the right things inside the business for long term sustainability.  The pressure for most publicly held companies to produce increasing profits on a quarter by quarter basis is in my opinion extremely detrimental to long term health and really limits the choices that are available to business managers and CEOs.  This short term focus on profits for measurement is certainly not the only way to measure the health of a business.  Sometimes a great new business venture or product line takes more than two quarters or a year to produce profitably.  That is why sometimes it makes more sense to keep a company private if you can find the funding without going public.  There is always a consequence to finding funding in the equity and venture capital markets.   (Remember the tortoise and the hare?  Patience still has its benefits!)

The late great basketball coach John Wooden of UCLA would tell us that the score doesn’t matter!  In other words the most successful college basketball coach would tell us that money doesn’t matter.  Wooden’s focus would be on the fundamentals of business, the teamwork, the competitive spirit and work ethic in order to measure the success.  John wooden knew that his team would be able to score higher against weaker teams and it wouldn’t really mean anything and it might even create laziness for the next effort.  We certainly have the same tendency in business.  When the economy is expanding we want to pat ourselves on the back but it could be that there is so much demand that our customers just about had to choose us.  Whereas, when the economy is contracting and our sales are down we usually are thinking we must be doing something wrong and really we might performing at the top of our game but it is just not reflected in the money score.

If you are flying an airplane at 500 miles per hour onto head winds of 400 your ground speed isn’t going to look to good but that doesn’t mean that there is something wrong with the airplane!  Measure success with the fundamentals of your business, process improvement, innovation, team effectiveness, productivity etc.  For many of us we will have to create some new measuring systems to do this but it is well worth it!  Using profit to measure our success is the easy way but not by any means the most effective!