Bright shiny business objects happen. Especially this time of year. For a variety of reasons.
Mostly, the rationale is that chasing multiple bright shiny opportunities offers lucrative and tactical outcomes of variable duration. However, bright shiny object rationale is no replacement for remaining focused on overarching strategy.
Ultimately, chasing bright shiny objects can spread business focus all over the place.
And if you really do not understand the business your company is in, then chasing those bright shiny business objects becomes a replacement for strategy. After all, chasing tactical, shiny objects sure keeps everyone busy and excited.
However, there is no enduring value in that tactic. In addition, there is no frame of reference for evaluating business decisions within that tactic, either.
After all, your overarching strategy must focus on a long-term goal of growing, expanding and sustaining the business. Not only that. The smaller the business, the more vulnerable it becomes when chasing bright shiny business opportunities. Then again, I’ve never met a business who could make the jump from growth mode to expansion mode based on a business model and overarching strategy (?) dedicated to chasing bright shiny business objects. Let’s explore.
Chasing bright shiny business objects compromises a SMB model.
It’s a new fiscal quarter. Consequently, both sellers and customer retention specialists are directed to acquire and retain as much business as possible. Except this mandate, if executed perfectly (or even partially), compromises the constraints of the existing SMB model.
It’s like throwing a party. What if everyone decides to show up? At the same time? Is the SMB model and are the practices robust enough? Can they accommodate every bright, shiny supply-and-demand specification from new and existing customers?
Be careful what you wish for. Small businesses which elect to juggle multiple bright shiny opportunities often become compromised. The strain starts with increased requirements on existing workforce capabilities, as well as on depth of the supply chain.
And that is only the start.
Bright shiny business objects compromise the type of business your SMB is in.
Take a solid look at your SMB client base, with my new assessment tool. Are you doing business with customers best-suited for your current and future capabilities?
I consulted with a SMB manufacturing CEO who told me his company was “poised to move to the next level.” However, his manufacturers’ reps sent him any job they could win. Every opportunity was viewed as a bright shiny business object. There was little filtering regarding whether the opportunity married up well with the type of business that SMB was in and their core capabilities.
Yes, financials looked good on paper, but not forensically.
Realistically, that SMB was not able to deliver consistently on what was promised by the sales team. Workflow represented simple, as well as complex, projects. However, the SMB didn’t have the workforce bandwidth and experience needed to continuously switch gears to execute different projects requiring different skill sets. The business they really were in was one-size-fits-all, not custom contract manufacturing requiring tight tolerances.
In addition, the sparse support staff were order-takers, unaccustomed to delving into client history and context. Therefore, over time, customer satisfaction deteriorated. As a result, customers refused to pay on time, if at all. Ultimately, cash flow was compromised.
The SMB had lost sight of the type of business they were in. They were dazzled by winning lots of bright shiny projects, many of which were ill-suited to their business model and core competencies. Gradually, but not unexpectedly, the majority of project wins resulted from low-balling on the part of the manufacturers’ reps and customer retention specialists.
Without processes and discipline, chasing bright shiny business objects derails SMB strategy.
The first order of business was aligning business strategy with business model reality. The next step was creating a strategy for the CEO to deliver the news to the sales and customer retention teams. Continuing to chase bright shiny business opportunities, as a strategy, ultimately eroded company brand and marketplace perception.
Either the organization had to invest and scale its business model to accommodate a new strategy of winning more sophisticated projects. Or, the SMB had to live with the realization that the marketplace currently regarded them as a low-ball, low-quality shop. Now, the latter strategy would continue the status quo: serving bright shiny business opportunities of low complexity and quality.
Ultimately leadership decided that was not the business they wanted to be in, made hard calls and took necessary steps to change their SMB model. Yes, these changes did not happen overnight. However, architecting valuable business model and strategy changes aren’t exactly bright shiny business objects, are they?
Does this business case sound familiar? Are you wrestling with similar issues?
Next steps towards professional innovation:
Babette Ten Haken serves organizations as a corporate catalyst and innovative speaker, strategist, coach and storyteller. Babette’s One Millimeter Mindset™ Workshops and Speaking programs leverage collaboration to catalyze professional innovation, workforce engagement and customer retention, especially in challenging digitally transforming environments. Babette’s playbook of industrial IoT team collaboration hacks, Do YOU Mean Business? is available on Amazon. She is a member of SME, ASQ, SHRM and the National Speakers Association. Image source: iStock