There is an old adage in business: “If your business isn’t moving forward it’s standing still, and your competition is gaining on you.”
This time of year I have a lot of conversations with business leaders about how they can get their business moving in the right direction. The CEOs I talk to tend to fall into one of two camps – either their organizations are in decline (their sales have fallen off and they need help bringing them back), or they have plateaued (their growth has gone stagnant, and they need help jumpstarting it).
In either scenario if business leaders choose not to do anything, they will just continue in the circumstances they are in. They will either continue declining until they fail, or they will remain plateaued until their competitors overtake their market share and then they will fail. The outcome is the same, although the time horizons will differ. If, however, these business leaders decide to take the steps needed to reinvent their organizations, they can achieve the outcomes they desire now and continue to evolve in the future.
Knowing When it's Time to Reinvent
Companies will often use their fiscal year-end or the calendar year-end to look at results and evaluate budgets. The discoveries they make will help them decide whether it’s time to reinvent for the coming year. While this is certainly better than not conducting an analysis at all, it is not ideal either.
Business leaders should be running reports every month (or at least quarterly) and tracking KPIs on an ongoing basis to understand what is going on in their organizations in a timelier manner. If sales plateau or taper off, business leaders can then leap into action to take the steps needed to reinvent far more quickly.
How to Reinvent
Reinventing your business requires looking at not only your past results but also what is going on in the market at large to ask questions like:
- Is our available customer base growing or shrinking?
- What is happening in our geography that may change the need for our products/services?
- Is our technology becoming outdated or being replaced by new options?
Combining situational knowledge with insight about the profitability of your various product/service lines can help you understand which ones are most profitable and are poised for continued success. Protecting those offerings while reinventing should be a key part of your strategy to know what you should do more of and what you should do less of moving forward. Business leaders need to continually evaluate their business’s situational position in the marketplace.
What does Reinventing Look Like?
During the reinvention process mature organizations can take the time needed to step back and be intentional about which changes they are going to adopt. However, companies that are in decline must operate with far more urgency. They still need to be as intentional as possible, but they do not have the luxury of time. Instead, they need to identify the low hanging fruit – the obvious next steps that they can take to turn the business around within their time horizon.
Regardless of which stage an organization is in, it should never throw the proverbial baby out with the bathwater. When reinventing a company should never stop their core business entirely to start doing something else.
Facilitating reinvention is best done before you truly need to do it.
Unfortunately, companies that are in decline have already missed the opportunity to proactively set themselves up for reinvention. Companies that are plateaued will benefit greatly from taking steps to anticipate the roadblocks or bumps in the road are coming next.
Both internal and external research allows companies to glean the information they need to strategize about their reinvention. Companies should analyze regular financial reports, dive into their ERP systems, and tap individual departments for insights to inform strategic decision making around product development, expansion, marketing and Go-To-Market (GTM) plans. A CFO is instrumental in this area to help the rest of the executive leadership team decide on the company’s overall strategy. Organizations that do not have a CFO will no longer be able to put off hiring one, even on a fractional basis, if they hope to reinvent successfully.
Leading a Reinvention
Once the decision to reinvent has been made, the CEO needs to champion it, or it will never get off the ground. Reinvention requires a mindset of change. The flexibility and adaptability necessary to lead this evolution must be embodied at the highest levels of the organization.
What to Expect
After an organization successfully reinvents itself, it will be firing on all cylinders, which means everything improves. Areas that were once clunky and underperforming are finally running smoothly. Revenue increases, profit increases, employee retention improves because people are having fun, hiring becomes easier because the company becomes a place where people want to work, and customers are more engaged with the brand.
After a reinvention the company will continue to evolve organically in the short-term, but that momentum will not continue indefinitely. For ongoing success post-reinvention intentionality is required – the deliberate steps that can keep an organization moving forward.
So, what should you do next after a reinvention? Keep pushing the company forward!
Part of the process of reinventing includes pulling in data from numerous sources, running regular financial reports, and tracking important KPIs. Companies must continue doing those things on an ongoing basis to realize continued success. Leadership should also implement an evaluation cycle to time decision-making around their ongoing evolution. The best way to facilitate a future growth and success is to proactively plan. That is what keeps a company going where it wants to go – to move forward steadily, to jump to the next step, to keep growing and evolving.
Is your business stuck or experiencing a decline? When it’s time to reinvent your business, reach out to me! My team has extensive experience moving companies forward to help them get past a plateau or reverse a downward trend. Find out how we can help your business to reinvent and continue to evolve in a positive direction. Contact us today!