2012 is finally here. The general consensus among local economists is that this year we will not experience any significant improvement in the economy as compared to 2011. For those that share the idea that the general economy acts as the ocean’s tide - when the tide is up, all of the boatsascend with the tide; when the tide is low, all of the boats descend – the outlook isn’t encouraging. The analogy suggests that businesses (the boats) either perform well (during high tide) or perform poorly (during low tide) depending on the state of the general economy (the ocean’s tide).
While there is some truth behind this analogy, we believe the picture it paints is incomplete. For sure, the economic state of a country or region will have an influence in businesses in general. But we’ve seen businesses fail during period of economic boom as well as businesses succeed even during the most difficult economic periods. There is something missing in the high-tide/low-tide analogy.
The missing piece in the analogy is the fact that businesses can create their own economy. What do we mean by this and how can it be done?
Let me help you perform a simple thought experiment. Let’s say that I know three different businesses that experienced double-digit profitable growth during 2010 and 2011. All three are projecting double-digit profitable growth for 2012. I’ve arranged visits to the three businesses. Although they operate in the same industry that you do, you will be able to ask them anything you want and they’ve agreed to answer truthfully. These are three very successful businesses and you will want to take advantage of this unique opportunity. What would you ask these business leaders? What would you want to find out? Answer these questions in your mind before you continue reading.
We’ve performed this thought exercise with hundreds of managers and business leaders and, invariably, most of the participants want to find out one thing from the leaders of these three companies: what have they done to achieve such impressive growth during these difficult times.
We call this response the solution response. Someone has solved a problem and we want to find out the solution. At the surface, this approach seems promising. But beneath the surface, it carries a false premise. It presupposes that the competitive advantage of these businesses lie in the solution themselves. This is the kind of thinking that fuels thousands of benchmarking visits. It’s also responsible for the success of hundreds of business bestsellers peddling magic formulas and “secrets” for success.
The solution response misses a key component of business success. In the final analysis, the competitive advantage of any business or organization lies in three instrumental abilities: 1) the ability of its employees to fully understand the current state of affairs, 2) the ability to envision a promising and productive future state, and 3) the ability to devise intelligent solutions to the challenges that stand between today and the future.
The real secret to double digit growth does not lie in the particular solutions these three hypothetical companies devised; it lies in their capacity to formulate and implement smart solutions.
Companies that create their own economy figure out the emerging needs customers have that remain unsatisfied. They figure out how industry patterns and trends will change the landscape of their business and proactively prepare for the future. They figure out how to solve the challenges that lie between their goals and their current state of affairs.
If you are still looking for a New Year’s resolution worth pursuing, choose to increase your team’s ability to think and learn. Doing so, you may find yourself creating your own economy.
Copyright 2012 QBS, Inc.