Innovation And Thinking Ahead Drive Ongoing Business Success
Starting a business is easy when compared to the effort required to keep an enterprise dynamic and vital.
Q: My partner and I recently began a small business in Spokane producing laptop presentations for sales and training purposes. We have a contract that will keep us busy for a year. What should we be doing now to provide for success beyond that?
A: The key to entrepreneurial success in a rapidly changing world is innovation, the process of developing new and better ways of doing things. You should be thinking about new operating systems, techniques for production, financial procedures and marketing initiatives. Renowned economist Joseph Schumpeter claimed that continuous “creative destruction” of the old, established ways of doing things within a firm was absolutely essential. He believed that the time to implement change is when things appear to be going well. In other words, “status quo” is the kiss of death.
Innovation isn’t always “rocket science.” It doesn’t require “eureka” discoveries. Automatic teller machines, VCRs, HMOs, convenience stores and even personal computers were the result of blending existing know-how and new technology to create something different and valuable.
Andrew Carnegie, Henry Ford and Steve Jobs were not revolutionary inventors, they simply saw a need and assembled existing resources into new, marketable configurations.
To maximize your innovative power you have to follow a few behavioral rules:
Observe: Search out new and useful information from media, books, and personal contacts (strangers with time to kill in airports are good sources).
Learn to be a people-watcher and an eavesdropper. Watch the soaps and MTV to decipher trends. Go to the library and scan obscure journals and periodicals. If you want the edge, don’t depend upon the same sources of information as your competition.
Involve: Seek-out novel information and ideas. Ask questions; avail yourself of new experiences. Search with all of your senses and be constantly on the lookout for opportunities.
File and retrieve: Devise workable methods of accumulating potentially useful information. Start a separate file for each topic with promise and then stuff it with clippings, notes and correspondence that will keep you well informed and ready to act.
Filter, relate and extrapolate: Once in hand, information must be sorted and related to decipher trends which, in turn, should be projected to construct feasible future scenarios. Then the capacities and resources of your firm have to be related to those scenarios to determine exploitable opportunities.
Think: Use both sides of your brain. In school we are taught to use the left side to be logical and pursue goals in a step-by-step fashion. But its the emotionally-driven right side that allows us to see the “big picture” and the patterns that can be exploited.
Do: Once you discover an opportunity you must act quickly. According to my ol’ uncle Ollie, opportunities are like eggs. “They have to be hatched within a reasonable time period, or they wind-up fried.”
Q: I’ve been struggling with my business for three years, and still haven’t made a penny of profit. How can I tell whether its time to give up and move on?
A: The typical business gets started and survives because its founder doesn’t know the meaning of the word “quit.” Absolute conviction and commitment are essential. Anything less, and an entrepreneur’s chances for success drop to nil. But unswerving dedication to a goal is warranted only if the cause is truly worthy.
That’s why a business idea must be scrupulously evaluated before any attempt is made to commercialize it. You could work fruitlessly for a lifetime trying to convert a bad idea to a marketable product.
Assuming a good concept at the beginning, an entrepreneur usually has to give it his all for three to five years. Most new firms don’t produce a profit in their early years. I’ve seen some venturers go for ten years without a reasonable return because they believed in - and enjoyed - what they were doing.
In my opinion, there can be no second guessing whatsoever for at least three years. For the next two years you should keep the same confidence level but do some careful, limited analysis to determine whether fine-tuning is necessary. If your profits and prospects haven’t changed after five years, give your concept, strategy and tactics a very thorough examination.
Make sure your opportunity hasn’t turned into an obsession. As Kenny Rodgers advises, you have to know when to “when to fold ‘em.” This decision is as important as the one that launched the business in the first place, but it shouldn’t even be contemplated early in the venture.
xxxx Paul Willax is the Sandifur Distinguished Professor of Entrepreneurship at Eastern Washington University. Copyright 1995 Paul A. Willax.