One of the common mistakes we see business owners or managers making on a regular basis is undertaking decisions based on only one piece of advice, one case study or more generally, just one source of information.
Regardless of whether your source is a professional business consultant, International case study, management book or scientific study, in business there is never just one answer.
But surely there must be some business rules that are universal, right?
Innovation is good for business.
Your staff are your most important asset.
Well, let’s put those to the test. In the case that “innovation is good for business,” everyone knows the stories where innovation has triggered business success (Apple being the poster-child for this) and where a lack of innovation has proven a company’s downfall (Kodak versus the digital camera, Borders versus Amazon, the encyclopaedia industry versus Wikipedia, etc).
But, there have been countless occasions were companies have over-innovated, stretching their capabilities and losing touch with what is their core competency, often leading to major issues or substantial cost blowouts.
Boeing’s recent 787 project over-extended their capabilities as they attempted to overhaul too much at once (battery cells, electronics, fuselage and more), and an aggressive attitude towards innovation (as a knee-jerk reaction to losing the number one plane builder title to Airbus in 2003) on the design of that project lead to a change of battery technology to save a grand total of 16kg across an entire plane.
Not only was there considerable cost attached to that ultimately negligible weight saving, the batteries have a tendency to catch fire, leading to the grounding of many of their planes, as well as millions of dollars in cost blowouts. Too much innovation, or in layperson’s terms, “biting off more than they could chew,” will see the 787 go down as one of the company’s biggest failures.
Harvard Business Review no less also talks about balancing innovation with complexity, ensuring that innovation projects are not over-extended (you can read that here).
But what about staff being the most important asset in a business? Surely everyone needs great staff?
Well, Australian company Freelancer.com works on a model where it makes money by not employing anyone directly, but acts as a technical platform allowing others to find “free lancers” themselves. Even those who using the platform aren’t actually employing anyone, but merely using them on a project-by-project contract.
This sort of model has led to a rapid increase in the number of businesses that are essentially “shell” companies, employing contractors on a project-by-project basis depending upon their needs.
What we encourage all our clients to do is take this “challenging” approach to business. Just because a competitor has successfully implemented something, or just because a business consultant told you to do something a certain way does not mean it will work for you.
For every piece of business advice or cliche, you will find 50 businesses that have successfully followed that methodology, and 50 where it has failed.
What this leads to is the ability for business owners and managers to synthesise multiple different theories, approaches and pieces of advice, and apply these in the context of their own business, not someone else’s.
Then they are in the best possible position to arrive at the decision that is best for their business.
[Image by Kentaro IEMOTO@Tokyo]