Tuesday, August 6, 2013

The Hardest Business Decision You’ll Ever Make: When To Stop and Change Course.

The Hardest Business Decision Ever.
A few days ago I attended a major digital marketing event in Alicante, the iDay, with my dear friend Reyes Ramón. As usual, one of the presentations deeply caught my attention and inspired me to write about the subject I want to share with you today.

This time, one of the guest speakers, Pep Rubio, referred to the fact that recognizing when you have to make a stop to change your company’s course and "win while losing" is a very important element that should be taken into consideration by any business owner.

And I agree 100% with him because it looks as if, in the world we live, talking about "making a stop and changing course" is deeply associated with failure, giving up or losing, and I kind of see things on a different way.

A while ago, in a post I wrote for this blog, I said that "it’s not the same to focus 100% of your energy and time in achieving your goals, than to keep on doing it after it has stopped making sense" and it's something I recommend to all the people I have the opportunity to talk with about business planning and to those whom I serve as a consultant.

Knowing what our options are when making decisions.

I like to apply in my life interesting things I have learned from other areas specially when they prove to fit and perform very well. While I was training for my private pilot's license, one of the areas in which instructors placed more emphasis was practicing emergency procedures.

I remember one of the exercises we performed regularly was the emergency landing and whose practice did not begin when the instructor simulated an engine failure but much earlier.

The first step was to make sure I knew which were the airports closer to my location or have already chosen a landing area if an engine failure was to occur. Thus, when the instructor was to say to me "you’ve lost the engine, what do you do now?" I already had in mind a couple of places to land and I could focus then on flying the airplane and landing it safely.

What’s the purpose behind practicing this procedure? Well I think it's very simple: Knowing in advance what my options were to land the airplane, allowing me to focus all my attention on the emergency checklist I had to follow if an actual engine failure had happened during a real flight.

Keep in mind that, in my case, I did it all during my training, and have never had, thank God, an emergency during a real flight and if I had, I guess I’d have been properly and sufficiently trained to handle it.

A change of course is always the smartest decision.

Let’s think of a real life situation: During a scheduled flight, one of the airplane's crew members realizes something is wrong. Analyzing the information he’s receiving from engine control instruments (does it sound like KPI analysis to you?) he realizes an engine is losing a lot of pressure and surely will fail at any time.

What should the flight crew do?

  1. Declare an emergency and divert to the nearest airport, make an emergency landing and get the airplane checked and repaired if possible? or ...
  2. Stubbornly continue with the flight to their destination airport, despite putting at risk lives of all people on board, including themselves?

Even though the correct decision looks like obvious, or at least it should, believe me when I tell you must of the times isn’t that easy to make.

Let’s go now to a business environment: Your company has a customer who has represented about 80% of your monthly billing over the past two years and suddenly lets you know they will soon be going out of business therefore will not be buying anymore from you.

What do you do then? Do you try to keep on going in despite of losing 80% of your monthly billing? Don’t you think it’s time to seriously consider making a stop and change your course?

By the way: Don’t ever let your business depend on a single customer. It’s a situation you should avoid whenever possible :-D

Would you like to know of some companies that have made dramatic course deviations at some point?

When it comes to large companies in our digital world, we tend to look at them as those big, ever successful monsters who everyone envy, and we don’t even think that, just like you and me, these companies also had a beginning, and they haven’t necessarily been successful all the time.

Many of them have even had to make major course changes during emergency situations.

I read in an article entitled "Why didn’t I think of that? 10 unplanned course  changes that were successful" (in Spanish), published by Javier Megías (whom I truly recommend you to read), about today’s major companies which, at some point in their lifetime, have had to sit around the table, with a clear and fresh mind, and make the decision to change course and move on.

In some cases, the changes were smooth and, in others, were deep and radical. Did you know that YouTube began as an online dating site?

In any case, the idea I want to share with you today, just in case I haven’t done it a couple of times before, is that flexibility must be embedded within the entire business plan of any entrepreneurship, to allow for these decisions to be made without causing further damage.

Remember: It’s not the same to be a persistent person than to simply be stubborn. What is the main difference? Stubborn people keep pushing on and on, even though what they are doing is not making sense anymore.

Related Posts:
A business plan’s flexibility: obstinacy or perseverance?
Things you can learn from the army.

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