Bad Strategy Or Bad Economy: Which Is It?
Don’t fix what isn’t broken.
Right now, companies tied to the real estate sector are having a difficult time.
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.
Why?
He understands that his company is heavily tied to the market and to external forces, like interest rates.
He’s used to weathering this kind of storm. He knows that his company rises and falls based on macroeconomic factors.
In other words: he’s clear about what he can control and what he can’t.
***
You can imagine a different CEO in that situation (maybe you?).
Something isn’t working the same way inside your business. You aren’t getting the results you expected.
So you get under the hood…and you start tinkering.
You revamp your messaging.
You hire more sales people to increase revenue.
You create new offerings or try to “pivot” the business model.
In other words: you panic.
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.
***
Standing still is sometimes the hardest part for entrepreneurs. We’re biased towards action.
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.
And the problem might have been something outside of your business (i.e., the market).
Look, this is a nuanced idea. I’ve recently written about how a cooling economy can reveal problems in business strategy.
It’s easy to make money when cash is flowing freely.
But the opposite isn’t necessarily true. Just because your growth is down doesn’t mean you have a bad strategy.
How do you know whether you need to hunker down and stick with what you’ve got or make dramatic strategic changes?
Listen to what customers, employees, and industry experts are saying.
Ask for advice from your leadership team, outside advisors, peer groups, and other people you trust.
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.
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.
Because you’re trying to fix something that isn’t broken.
Need help evaluating the next step for your business? Get in touch.
