My name is Steve Davis and I’d like to talk about how to reignite your business growth.
88 percent of all companies fail to achieve profitability. And 90% of those had a strategic plan. Which shows that they do strategic planning wrong, that they’ve been taught wrong, that the universities the way they put it out his wrong. They have to change their mindset on how to do it.
Corporations and universities say you need to do strategic planning, but they never teach you how to do it correctly. Nobody ever asks the important question. I’ve been in hundreds and hundreds strategic planning sessions, both at big corporations and small. The problem is they wind up being nothing more than what sales and marketing tactics are we going to use over the coming year. Nobody ever asks, “does our business model still makes sense and does it need to change?”, because they’re too interested in protecting the status quo.
Take a look at Kodak – Kodak had all the major patents in digital photography and digital photo printing, but they were too interested in protecting the status quo, their paper sales, their film sales, their chemical sales. And what happened? The market went away from them.
Adapt or Die
What they forgot to address, and what they didn’t realize, like many companies, is that if you’re not willing to disrupt yourself, a competitor is going to come in and do it to you. So you need to either adapt or die. If you look at the Fortune 500 from 1955, 85% of all those firms are gone. And I guarantee you they all did strategic planning every year. So something is wrong.
So the key question is, does your business model still makes sense? Now, you’re going to wind up getting a lot of crap thrown at you if you say the business model doesn’t make sense and we’re going to change. You’re going to get garbage and pushback from investors. In good times, investors think everything is going well, there’s no need to make a change, that’s risky. And you’re going to get pushback from employees, but there are opportunities to do that.
About every 5 to 7 years we go into a recession, sales are down, sales get flat, profitability goes down. Winston Churchill had a great quote “never let a good crisis go to waste”. If sales are down, sales are flat, a product launch is going bad, you’re in a recession, investors will give you a lot of leeway in whatever you need to do, and so will employees, to ensure the viability and long-term goals and long-term viability the company. So they’ll give you the capability of doing things, that if things were going right in the industry or in the company that they might not give you normally, so take advantage of it.