How to make profit in a changing market

Making profit is an obligation for all enterprises whether big, small, government, not for profit or private. This obligation is not possible to achieve with a policy of status quo. In fact, all stockholders, owners, and constituents know that producing quality profits is the way to avoiding a firm’s rapid demise. So how does an enterprise make profit in a changing environment?

Speed is now an integral part of successful business strategies. But speed on its own will not suffice, but rather a combination of speed and the ability to respond rather than react which is the goal. There are many things which support a strategy of responsiveness. This article looks at 4 key elements of culture and purpose.

  1. Renewal

In order to be successful in a changing market, a responsive business must constantly renewal itself. One way of renewal is to create the ability for people to flex to meet needs as they arise.

Small businesses are generally best at this as systems are less fixed, and decision making is spread. Everyone in a responsive firm understands that each individual makes a contribution to the overall success of the firm and accepts their responsibility in the success. Large firms can adapt to a small business psyche if the safety of hierarchy and protection of systems is not too difficult to shift.

The onslaught of the Social Media revolution has supported an environment where products can become unfashionable mere days or weeks from successful launch. Even in a stable environment, the situation in 3 months will likely be different from now. And in 3 years it is probable that the market may no longer be interested in the products and services which are provided today.

Business must seek to change and shape its environment. Where a business is aging, rather than renewing, its problems are systemic. No amount of creativity and eagerness can make a difference if the reality is systemic stagnation. Larger businesses can unwittingly fall into this situation.

  1. Vision.

Have leaders that have the ability to create a picture of the future to which efforts can be directed and then persuade the business community to that vision.

A case in point – for Fred Hollows, an Australian specialist in eye disease, whose vision was to stop Australian Aborigines losing their sight to trachoma, his ability to visualise and communicate that the disease is preventable has gained money and support. And as a result, the high incidence of trachoma in Aboriginal people is no longer acceptable and funds are made available to reverse its effect.

Responsive businesses should have visions of how their business fits into the future. They should be clear on what their business is, and will be, and communicate this well to their people, customers and others.

  1. Community

A community connects. A business which comprises small groups rather than a single community will find it difficult to meet the tumultuous times with speed. The leaders of a business can also be limited if lobby groups are allowed to develop in the firm.

People now come from a myriad of cultures, values and beliefs. Dislocation exists. A firm with a known set of values, which are lived by all in the firm is essential.  How can a business operate where values exist which are unacceptable or undesired by some?

The Thinker, Seth Godin, promotes the idea of tribes to optimise business returns. He defines a tribe as: “a group of people connected to one another, connected to a leader, and connected to an idea”.

  1. Dissent

Where does innovation arise if not from people finding something lacking in the current product, procedure or service? Looking at something anew can change a system, product, process or relationship. Leaving it as it is does nothing.

Developing a culture of dissent encourages people to try something new and to succeed or fail in doing so. Most of the time our risk adverse society identifies failure as something which must be avoided but a responsive business says that failure is part of each person’s responsibility.

Where people see failure and look for ways to tap into the idea to produce success for the future will be seen as a stepping stone to success, not the end of a journey.

When asked by a young journalist if it felt like failure when he had to go through 10,000 bulbs to get one that worked, Thomas Edison responded: “I didn’t fail.  I just found 10,000 ways that did not work.” New ideas come from changing the status quo – not keeping it as it is.

No longer is a competitive advantage differentiation or cost but now also includes speed of response.  No business can afford to stand still in a changing market and leadership is key. Strategies supporting agility, flexibility and responsiveness are essential regardless of the external forces on the firm. Flexibility and responsiveness are driven from the top, and assumed by all in the firm.

Will your firm be renewed and your current operations obsolete? If not, then why?

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