Business SOS: What To Do When Business Goes Wrong
Bev James shares with The NextWomen her tip for how to respond to problems in business when they arise by remembering the 6 Rs – Recognise, Rationalise, Read, Review, Retest and Re-invent – explaining how this method can help solve issues and enable success.
A business can often feel like it takes a life of its own, complete with all the inevitable ups and downs that arrive on a daily basis. It is the way that we respond to these ups and downs which determines success in business. Take note of the 6 Rs for your Business SOS to make sure your response sets you up for future success.
1. Recognise What’s Going On
How long do you wait until crisis hits, or even worsens, before you recognise that there is a problem?
One practical tool which can be used to keep an eye on the most important data that could indicate a crisis is a Key Performance Indicator (KPI) dashboard. Your KPIs are the most important items of data in your business, which express how well your business is doing. The KPI dashboard is the cockpit of your business; it visually displays how your business is running and when warning signs appear. The tool makes spotting changes and possible future threats and weaknesses, as well as current issues, straightforward.
2. Rationalise the Problem- Don’t React Too Quickly
When a crisis hits in business, it is easy to hit the panic button and go into reaction-mode. Yet there is a big difference between a jerk reaction and a considered response. The natural human reaction to a crisis is to fight or take flight.When a business reacts too quickly, often little time is given to careful consideration and rationalisation.
Whether your business relies solely on you, or whether you manage a team, keeping your focus on the long-term success of the business will help you to create effective solutions rationally.
Consciously set aside time to problem-solve together with only the important goal in mind.
3. Read the Opportunities and Threats
When a crisis hits, there are clues about hidden changes that affect your business which may have remained under your radar. As I would suggest in any initial business plan, a detailed SWOT analysis is crucial, and should be refreshed consistently. In a crisis, first identify the clues that hint towards factors outside of your business: what fresh opportunities and threats exist in the market that you haven’t yet identified?
Proceed with consideration when conducting your analysis of the market; some changes in the market may be a simple blip, and you may not need to make incremental changes to adapt.
Nevertheless, now is the time to have your finger on the pulse of your business’ context, and have a grasp on long-term changes occurring.
You may spot changes in trends, due to economical climates, legislative change or shifts in tastes in the market. Developments in the technology can also change their behaviour and so, in turn, can affect the wants and needs of your customers, as well as the activities of your competitors.
It’s important not to obsess over your competitors, but having an idea about the threats they impose is crucial to maintain competitive advantage and minimise business crisis.
4. Review the Details
Understanding the market is one step forward to resolving holes in the business, but this has little value if you do not review how the company is responding to these market changes. Business systems or marketing processes that have worked for you for a long-time may no longer be relevant in light of fresh opportunities and threats. Now: review the strengths and weaknesses of your company - these are likely to have changed significantly since the first few months you started to run the business.
Refer back to your Key Performance Indicators to prioritise your review. For example, there is little purpose in focusing on your costs if the real problem is your sales figures. I commonly see entrepreneurs who lose touch with the customer experience as they move their focus away from the bottom line. Review what is happening when your customers interact with your business: from first hearing about you, to leaving you.
By tracing the customer’s journey yourself, you may find pieces of the puzzle missing that you were not aware of.
Compare the customer experience to your KPI metrics to identify clear strengths and weaknesses in light of fresh opportunities and threats.
5. Retest the Solutions
When making incremental changes to any level of your company, it’s important to make them slowly and gradually. Make one change at a time, so that you can test and retest the effects of the change and assess their efficiency. It is also important to continuously evaluate the effects of any changes that have been incurred in other areas of the business.
6. Re-invent Your Business
Necessity is the mother of all inventions, and every problem has a solution.
Although a blip in your business may have seemed like a problem, there will be a new solution to your business that would not have come to light without experiencing the blip.
Re-invent your business, from the processes, to the costs, to the team you are working with, and your business can improve for the better.
A blip in business can be a good thing: it’s a chance to reassess and reinvent your business for the better.
Image courtesy of bplanet/FreeDigitalPhotos.net
Bev James is CEO of The Academy Group including the Entrepreneurs' Business Academy and EBA for Coaches, joint ventures with James Caan; and The Coaching Academy – the world largest training school for coaches. She is a millionaires' mentor, a serial entrepreneur and author of DO IT! or DITCH IT: Turn Ideas into Action and Make Decisions That Count – 8 Steps to Business Success.
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