Posts Tagged challenges
They Why of Change
Yesterday I wrote about change and that you need to be prepared for it. The next question is why should you change; but more importantly, do you consider the whys?
Reading an article on Seth Godin’s page, “The Why Imperative”, you wonder if there are two reasons people are asked to change. One, it’s an extension of what they do and it is needed because of changing market conditions, and two, it’s a change for the sake of change.
In other words, “Change” can get out of hand. People change because it is something to do, as opposed to something that is the right thing to do. These changes then affect everyone in different ways and can cause people to be more reluctant to changes (because of the poor history of success).
So, when do you change and when do you not? The first step is to ask, “Why are we changing?” The second step is to have a way to properly evaluate that change and to evaluate with the proper objectivity that also takes into account the costs to overcome the challenges. Changes have to deal with three challenges: strategic, political and cultural.
Ideally, its purely strategic decisions: is it more economical? However, the reality is that change costs time, money, and political clout. Sometimes it does not make sense to do the change because of the other elements.
It never should hurt to ask why but it could hurt to do it. This could be an opportunity for someone else. Or, it could identify the selling points to get people to change.
Tell me about the marketspace?
Showing understanding of the business and the market is required to attract the savvy investor. The March 23, 2009 post lists questions that the investor may ask to determine if the entrepreneur did their homework. This post looks at one of those questions:
What is currently going on in that marketspace (the big issues)?
This question is much more than it seems. This question allows the entrepreneur to talk about the opportunity and potential of the company. If the entrepreneur just supplies information then they have missed the point.
While it may be obvious how to answer this question and just rattle off a few pat answers, remember that the audience is potential investors. They may be savvier than the entrepreneur in that industry or totally ignorant (in which they may know of experts). Always treat them as “well-informed” but ignorant of your company. The answer should be concise, but not confined to a listing of the major issues. The audience needs to know why your company is important to the industry and how your company is going to address a problem in that industry.
This question can be broken up:
- What are the major challenges of the industry now?
- What is the future of the industry?
- How is your company going to be affected now and in the future?
- How is your company going to address these challenges and turn them into opportunities?
- What is the expected outcome for your company and possibly, the industry?
This may seem like the entrepreneur is thinking too big. Is every business going to change the world? No. This still applies to someone on a much smaller scale.
What about someone opening a restaurant in the neighborhood? The restaurant industry has challenges and a future. The neighborhood may pose unique challenges to the restaurant which can be turned into opportunities. It may be challenging to open the restaurant, but the owner has a fresh concept that has proven successful in other similar neighborhoods. Rather than changing the industry, how would the restaurant change the neighborhood, or the immediate stores around it? Will it cause other stores to open up near it and see even further increase in walk-in traffic?
Once again, in a very concise manner, the smart entrepreneur can inform the investor of what is important about the market, how the company will address it, and how the company will be successful. Rather than seeing this question as just getting information, this is another opportunity to sell the potential of the manager and the company.