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Bad Strategy Or Bad Economy: Which Is It?

Eric Crews
|
9.28.2023
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Don’t fix what isn’t broken.

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Right now, companies tied to the real estate sector are having a difficult time.

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But I recently met with one of our clients in this space. He was and continues to be one of the calmest CEOs I’ve worked with in the last 6 months.

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Why?

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He understands that his company is heavily tied to the market and to external forces, like interest rates.

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He’s used to weathering this kind of storm. He knows that his company rises and falls based on macroeconomic factors.

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‍In other words: he’s clear about what he can control and what he can’t.

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***

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You can imagine a different CEO in that situation (maybe you?).

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Something isn’t working the same way inside your business. You aren’t getting the results you expected.

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So you get under the hood…and you start tinkering.

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‍You revamp your messaging.

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You hire more sales people to increase revenue.

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You create new offerings or try to “pivot” the business model.

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‍In other words: you panic.

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And if you’re making changes without identifying the real root cause of your problems—the front domino causing the issues—you might end up worse off than before.

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***

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Standing still is sometimes the hardest part for entrepreneurs. We’re biased towards action.

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That impulse to tinker may get the result you want. But if the tinkering isn’t well-considered, you might blow up everything you’ve built.

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And the problem might have been something outside of your business (i.e., the market).

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Look, this is a nuanced idea. I’ve recently written about how a cooling economy can reveal problems in business strategy.

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It’s easy to make money when cash is flowing freely.

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But the opposite isn’t necessarily true. Just because your growth is down doesn’t mean you have a bad strategy.

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How do you know whether you need to hunker down and stick with what you’ve got or make dramatic strategic changes?

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‍Listen to what customers, employees, and industry experts are saying.

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‍‍Ask for advice from your leadership team, outside advisors, peer groups, and other people you trust.

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‍Then, as calmly as you can, form a hypothesis. Take steps to prove that hypothesis. Be as methodical as possible. Not necessarily slow, but methodical.

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If the economy is truly impacting your company (and it’s not a story you’re telling yourself), make a plan to weather the storm. Don’t blow up your business model.

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Because you’re trying to fix something that isn’t broken.

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Need help evaluating the next step for your business? Get in touch.

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