Entrepreneurial Challenges in the New Economy: Overcoming adversity with savvy strategy, bold execution and the customer front & center

by James D. Roumeliotis

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The new normal encourages an entrepreneur to deal with any current situation no matter how daunting. However, rather than lamenting the obstacles, confront and deal with such issues directly.

To quote Albert Einstein:

We can’t solve problems by using the same kind of thinking we used when we created them.”

A savvy business person and a leader views great opportunities in a rapidly changing world economy. Amongst other tactics, make sure you thoroughly plan with fortitude and execution.

Driving Initiative

Leadership with a clear vision is what’s needed first and foremost; otherwise everything else in an organization may not matter much. Businesses with inept leadership usually fail in the first year or two, but even established companies can stumble badly when they outgrow the capabilities of the founding team.

Research by the U.S. Bureau of Labor Statistics shows that nearly six in ten businesses shut down within the first four years of operation.

Being a successful entrepreneur is not an effortless task. It takes plenty of sacrifice and will power to confront various problems which not many are prepared to make. It takes strong faith, to believe in yourself, your product or service and to stay motivated on a daily basis to keep it running despite many obstacles, as well as the added challenge of staying ahead of your competition.

Note that there are no magic formulas. During trying times and particularly in the growth stages, you must stay on top of your project. Adapt to your new competitive environment. Do so in a proactive manner and in a spirit of authority.

Understanding Customer Relationship Management (CRM)

Entrepreneurs sometimes make the cardinal mistake that they are in business just for themselves. Don’t forget that you are working on behalf of your clients. Without the ability to attract and retain clients, revenues and cash flow will be greatly affected. Always be customer centric.

1) Build brands then launch products. People buy brands not products. Brands stand for something your target customer identifies with.

2) Having customer experience is never enough. It is the value created for a customer. You may buy great bagels at a place that has poor customer service, or mediocre tasting bagels at one which is very customer centric. It is all about value perception.

3) During economic downturns, marketing spend should continue, not decrease as you want to lay the groundwork for better times ahead. Maintain building and retaining your brand in the consumers’ mind. Just about everyone knows McDonald’s. The reason is clear: the firm never ceases to spend at least 5% of sales on marketing activities.

4) Listen to your customers who truly transform your business and deliver value, excitement, and surprise. Most importantly, learn how to truly engage with your customers.

Fate Favors the Bold

Forgo routine and avoid surprises. Complacency is a comfort zone which yields marginal performance. It can cause deficiencies, stifle growth and progress. This syndrome should be replaced with drive and consistent improvement. The culture of the organization, along with its structure, plays a major role with the challenges it faces and how it deals with them.

Fred Hassan, a former CEO and chairman of Schering-Plough (now merged with Merck & Co.), once discussed during an interview that “Adversity is part of life and part of business. By dealing with adversity effectively, both people and organizations become stronger and better. It makes them more resilient.  It makes them more confident ─ because they know they can prevail even in tough times.”

Goals and objectives of the business are reached by preparing for them and taking bold steps to implement, as well as monitor progress against plan and adjust accordingly. Nothing should be set in stone. Changes and adaptability with the circumstances should be adhered to.

Differentiate Yourself

Regularly brainstorm with your staff and outside advisers (accountants, mentors etc) on unconventional, yet lawful, ways of improving what you do. In fact, change your paradigm and as Simon Sineck wisely stated at a TEDx presentation entitled, How Great Leaders Inspire Action.

Every single person, every single organization on the planet knows what they do, 100 percent. Some know how they do it, whether you call it your differentiated value proposition or your proprietary process or your USP.”

He went on to say, “But very, very few people or organizations know why they do what they do…By “why,” I mean: What’s your purpose? What’s your cause? What’s your belief?” In other words, what Simon was questioning is why does the organization even exist?

Continuous improvement (or progress) is not a onetime event, it’s an ongoing process. “Business as usual” is no longer a viable option and consistency is vital. It takes a willingness and involvement from everyone within the organization, including suppliers, to be on the same page, the right fit/culture and with the right attitude to get seamless results.

Strict Internal Financial Controls

A businesses’ finances should be supervised closely, borrowing/leveraging done wisely, and spending conducted within a prescribed budget.

In certain industries, such as manufacturing and food establishments, financial ratios and yields, respectively, should be strictly adhered to at all times. The success of any business is, in many ways, measured by the bottom line.

Should a newly minted entrepreneur need to hire an accountant, he/she would still need to have a fundamental knowledge of accounting functions. Nothing in that area should be taken for granted regardless if the task was delegated.

It’s Time to Execute – a recipe for strategic success

Creating strategy is less formidable than implementation, thus execution is not without its challenges. In addition, the larger the organization, the less nimble it is at executing strategy. It’s akin to a large ship having to make a sudden turn to avoid catastrophe.

Needless to say, tough decisions need to be made and those given/accepting the task are accountable for the timing and manner of implementation. The requisites for such individuals include project management skills, a definitive understanding of the execution of strategy, tenacity and most certainly achievers who thrive on results.

Organizations with a bureaucratic mindset struggle making fast decisions. Bureaucracy creates a climate in which the customer is not as important as the management and the company’s other employees. It also kills the organization’s competitive spirit.

As Jack Welch, former CEO of the industrial powerhouse, GE, has stated, “Bureaucracy is the enemy – it means waste, slow decision making and unnecessary approvals.” Welch felt that ridding the company of wasteful bureaucracy was everyone’s job. He urged all his employees to fight it. “Disdaining bureaucracy” became an important part of GE’s shared values.

At Google, the role of the manager is that of an aggregator of viewpoints, not the dictator of decisions.

For an organization to avoid the complacency and bureaucratic trap, it should encourage creative thinking, consider making innovation its foundation, and if applicable, cut layers of its bloated management structure for a leaner decision making process.

Innovation is what a business should be carrying-out as often as it’s required for its long-term existence. The old adage that goes something along the lines of “If it isn’t broken, don’t fix it” doesn’t sit well today with forward thinking companies that thrive on practical improvements.

There is nothing wrong with change if done to enhance or replace the status quo. It’s part of collective progress. For this to work everyone within the organization must embrace continuous change, rather than resist it. That may be easier said than done due to typical resistance emerging from people as a result of fear of the unknown.

It’s up to management to persuade their subordinates of the mutual benefits of change.

The Heart Of The Matter – being at the top of your game

The way to solve an organizational problem is to confront it and have it resolved without delay. It begins by laying a foundation which mainly encompasses creating strategy, optimizing structure and managing execution of decisions, ideas and new products.

Long term potential outcomes and worst case scenarios should be anticipated before problems even strike. This type of planning constitutes part of risk management. Unfortunately, most decision makers/managers are capable of planning, not executing. This creates a lack of bravado when carrying out strategy and/or confronting adversity

For an organization’s clients to receive stellar service entails having its house in order. Besides structure and an efficient operation, employees should be trained and empowered to do their jobs efficiently.

Seth Godin, a renowned marketing strategist stated succinctly: “If you want to build a caring organization, you need to fill it with caring people and then get out of their way. When your organization punishes people for caring, don’t be surprised when people stop caring. When you free your employees to act like people (as opposed to cogs in a profit-maximizing efficient machine) then the caring can’t help but happen.

Well-tuned organizations are operated by executives who are focused, resilient and disciplined yet not so rigid and resistant to change that they don’t check their assumptions with trusted advisors/sounding board.

There should always be an element of adaptability in decision making and business policy changes in tune with circumstances and with the times. Planning for adversity before challenges even appear on the horizon is key to the strategic success of any organization – big or small.

The best managed companies have one factor in common: They are constant achievers, exude managerial excellence and a well-targeted CRM. Their financial performance is reflected in their results.

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