What’s the toughest thing you have to do each day as a business owner that separates you from success and failure? What is it that makes some business owners monumentally successful and keeps others only nibbling at survival? It’s your ability to make decisions! Success in business is based to a great extent on the business owner’s decision making abilities. That means you! Your ability to make decisions, to formulate ideas, to identify problems and to evaluate solutions, allows you to differentiate yourself, your company, and your reputation from the also-rans. It’s what makes you unique. How you decide what you do, how you determine the direction of your efforts and how you utilize your resources, will ensure your profitability and success. Or it will be the last gasp of life from a dying business entity. It’s up to you.
There are two ends of the spectrum as it relates to decision making. At one end sits Hamlet, vacillating, hoping for divine intervention to pick him up and point him in the right direction. At the other end is Alexander (the Great), charging forward filled with divine inspiration, without any other consideration but domination of the world. We all fit somewhere in between. In business, decisions are made based on imperfect information, that is to say that we never have all the data that we would like, and we’re generally under some time constraint. Add desperation to the mix, and I give you the recipe for high anxiety. Every business owner has felt it, probably does feel it routinely. For some it’s a great motivator, for others it’s a slow death. If you’re going to reach any measure of success in business, if you’re ever going to be happy doing what you do, you have got to learn to make good decisions based on less than perfect information, that’s the real world. And what’s the result of decision making: change! A decision is a call to action, that hopefully will lead to a positive result. It’s a change, and change is the second hardest thing to do in business. When is it a good time to change?
There are those who will counsel you to keep paddling if things look good, “Don’t try to do anything that will upset the canoe, things are good right now.” But “things” seldom stay static. Business is a series of boom and bust, so get used to your world being tipped every so often. The challenge for most business owners is how to manage during those tough times. The fact is, they didn’t make the changes necessary when times were good, to cushion themselves and their business during tough times. When Joseph interpreted Pharaoh’s dream, Pharaoh acted on it and stored grain to sustain the people during the coming years of famine. Although things in the land looked good, he decided to prepare for the worst, and in so doing ensured the survival of humanity at that ancient time. A monumentous decision based on analysis of a dream, not quite perfect information, but enough to save the day.
When do you make a change? Do you wait until your world is collapsing? Or do you jam your paddle in the water and change course in spite of apparent calm water ahead? Think about this for a moment: when is the best time to change? Is it when you are doing well, or when you are sinking?
I’d like to suggest to you that the best time to make a change, is precisely when everything is going well. Why is that? Well, when things are going down the toilet, you are under a serious time constraint to turn things around, strike one. Any idea, as good as it is, needs time in order to implement it properly; it needs time to take hold and germinate in your company and spread to your customers; it needs time to market, to get the idea out and to generate results.
Any good idea will need resources to make it happen, strike two. You need time and money to investigate, evaluate, design, and market the solution that you are proposing. When your ship is sinking, you have little time and usually less money. Any idea, no matter how great, just won’t get fair consideration, and may be discounted entirely in light of the financial and temporal constraints.
Change is costly, it may work, it may not. If it doesn’t work, you’ve stepped on the banana peel when your other foot is already in the grave (metaphorically speaking): strike three. Change, although good, can be for the worse when it comes at an inappropriate time. Changing the course of an aircraft descending into the ground is a very good thing, however making that change when the aircraft is a mere ten feet from the ground may be insufficient to prevent the inevitable. In retrospect, the action may be judged to be a good one, but it came too late to make a difference, and therefore will be judged to be a bad decision. In business you’ll encounter innumerable nay-sayers, who will rain on your ideas.
When you’ve made the decision to make a change, and given it the appropriate consideration, time and resources to implement properly, that change will generate benefits. Doing something is infinitely better than doing nothing.
Finally, change costs. If you make the change and you’re wrong, you’ve incurred costs which may not be recoverable. If you choose to change when things are not going well, all you’ll do is dig yourself into a deeper financial hole. The margin for error is much smaller during tough economic times, which means small miscalculations or poorly laid plans may become catastrophic. During good times, when you’ve got some staying power and time, you can afford to make mistakes and recover. Even if your change costs you money, you can use that expenditure to save on tax! In order to do that, you need to have taxable income, something in scarce supply when the world is caving in on you.
So when do you act? Sooner, rather than later, in my opinion. When do you make that change? When you can afford it, when you’re in good shape, when you can do it from a position of strength. We’ll all make mistakes, that’s human, but it’s ultimately our decision as to how significant or insignificant those mistakes will be. You can minimize your mistakes, you can minimize the costs of your mistakes, you can learn and recover, it’s up to you. Change is a good thing. Deciding to act, to change, is a better thing. Making the change when the factors for success are on your side, well, that’s the best thing. Once you decide where you want to be, change will get you there. This is especially true, I’ve found, in industries that are periodically transformed by technology, like say, the graphic arts business! Look at what technology has done to your business, everyone with a printer is a graphic artist! How do you differentiate yourself and compete with laser jet printers and pdf’s? Were you ahead of the curve, adding value and innovating, or are you still trying to make the payments on that old dinosaur in the back, you know, that old klunker that keeps breaking down in the middle of a rush job? Keep your eyes open and focus your determination, don’t be afraid to alter course based on new data. Learn as you go, and reap the rewards. It’s not that tough.
Sid Karmazyn is a Chartered Accountant, author and speaker, who lives and works in York Region. Your comments are welcomed.
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