No business owner in their right mind starts out by saying "I want to limit my success". Oddly, once the business becomes self-sufficient there is a tendency for the owner and team to get stuck in a routine which becomes worse than having tough competition. Lack of trust and over attachment to, "we've always done it this way", starts dictating daily and weekly choices that stunt a company's growth. Let's look inside this box a bit further.
How History Repeats Itself
On Tuesday June 10th I was at a local community press release for the events coming up in the chic little town I live in, Port Credit, just 20 minutes west of Toronto, Ontario. It was a perfect night, with a turnout of approximately 150 guests that are business owners, media, and local VIP. Lively jazz played in the background, appetizers and beer from local homegrown suppliers flowed, and there was a comfortable buzz in the air as people mingled. A picture of success right? Not totally.
As the night wore on I crossed paths with some of the key people in the Port Credit Business Association and the conversation eventually touched on, "how are the local company owners doing?" What we discussed was that over a period of 9 years many of the businesses had not adapted to; the changing needs of customers; competition from out of town; utilization of technology; and outsourcing for expert assistance.
It's fascinating to find that the businesses that had grown and succeeded (not without their challenges first) had adapted and brought in expert assistance. In essence the owners had realized that as their revenues leveled off, or went into decline, they investigated and took action to get outside of their box. However, many other business owners were simply "too cheap" to spend money that would help them make more in multiples. "Cheap" was the first factor, another key factor I was told, is that all to often the business owners simply don't think about bringing in consulting help even though they may not have the skill set in marketing, accounting, customer service, etc.
Why Get Stuck In A Box To Begin With?
Last year I did a consulting project for GCP Elastomeric helping them re-engineer their outsourced manufacturing processes in China. Gary Mottershead, President, had shared with his team in a growth planning session, "the owner and company that grow to $1 million has one suitable skill set to make that happen. The leader and team that grows a company to $20 million is another group. The business that grows to over $100 million is composed of very different people. If a business leader and team want to go from $1 million to $100 million they either need to become those skilled people or find the team that know how to do it." Usually, a team that grows significantly is made up of both, those who have adapted and those who have the skills and experience at the necessary level.
In contrast as I looked at the "box" several hundred local businesses were working in, the mindset of those companies was to want growth, but not be willing to adapt and change from within to achieve it. To support this hypothesis Sol Solutions is in the process of conducting a survey on how small/medium businesses use advertising and promotions to grow. The initial findings are indicating a great amount of business comes from referrals. In talking to business owners, and management from Port Credit's BIA, the anecdotal stories support this preliminary finding.
From a marketing perspective, companies that grow through referrals are successful in a huge way. Oddly, this is a double edge sword because if it's the main source of growth, it means that the know how to bring in fresh customers is often very limited. So here is where the problem of being stuck "in the box" comes in. By failing to trust; or create a business model that others can run without management making every decision; and failing to bring in outsiders who have experience in areas where a company isn't skilled, a company of any size will keep getting the same results and eventually declining results.
Zig Ziglar put it well by saying, "If we keep on doing what we've always done we'll keep getting what we've always gotten."
I think that quote sums up pretty well why small and medium sized businesses sometimes stay in their box. What do you think?
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