There is a disabling disease that runs through family business leadership, especially those that are scaling up, and it can cause real havoc.
It’s called “Chasing the Shiny Penny Syndrome.” It’s when the company chases a new, “shiny” opportunity in lieu of the core – and perhaps boring – stuff that propelled the business to where it is today.
Every company has done this at one time or another. We learn about something new (a new product or a new market, for example) and the next thing you know, we’ve gathered the troops to march in a new direction after something shiny – something we can’t possibly do.
“But why can’t we do it? We are just as good as they are.”
And therein lies the crux of this disease. You aren’t as good as they are – you are as good as you are.
This is where it’s leadership’s role to step in and remind everyone of what you do better than anyone else. How you win every time. What you do best.
Chasing the latest shiny penny causes distractions, lost money and time, not to mention a feeling of defeat.
If you succumb to this disease, that shiny penny that pulled you off track is eventually overshadowed by yet another shiny penny, and another. It’s a vicious cycle.
DO NOT CONFUSE IT WITH INNOVATION
This isn’t to say to scrap innovation. In fact, innovation is how you survive in a world changing at hyperspeed.
However, there is a difference between a shiny penny and innovation.
Shiny pennies throw the team off track, while innovation solves real problems and puts the company in a stronger competitive position.
CORE CUSTOMER, CORE COMPETENCIES
There are two keys to successfully innovate.
The first is to focus innovation around your core customer, those customers most likely to buy products or services in the quantity required for optimal profit.
The second key is to focus innovation around your core competencies, the set of processes, systems and activities that make a significant contribution to your customer’s perceived benefit and are difficult for competitors to imitate.
Ask yourself and the team: “Does this opportunity fit our strategic goals for growth?”
That kind of focus and alignment with your team can produce extraordinary results.
You may find a need to modify your core customer or develop a new core competency to pursue the innovation or opportunity.
But then those decisions are now strategic.
Everyone understands the implications and costs and the team is aligned to successfully execute. A big difference.
DELIVERING ON THE BRAND PROMISE
So, how to avoid jumping from shiny penny to shiny penny?
Start by reviewing your strategic plan.
Is this new opportunity focused on your core customer? Does it help the business deliver on your brand promise?
You need a consistent framework of disciplined habits and rhythms that keep you focused and true to plan, adjusting as a team to meet new challenges, not as a lone wolf chasing a shiny new penny.
WHAT TO GIVE UP?
And if you decide, as a team, to pursue a new opportunity, then do what all great companies do – decide what you are willing to give up.
That’s right, give something up to make room for the new.
Strategy is much more about what you are not going to do than what you are going to do.
ALIGNMENT BY ALL
Every company has limited resources of time, money and people.
If you pursue something new, make sure everyone is aligned, resources have been allocated and priorities re-established.
You can’t do everything. Decide together what you are going to do that allows you to win.
Tom Garrity is managing partner of Compass Point Consulting LLC in Hanover Township, Northampton County, which provides growth and business transition consulting to small- and medium-sized businesses. He can be reached at 610-336-0514 or email@example.com.
< Compass Point Consulting will sponsor a free workshop from 4-6 p.m. Nov. 9 at Lehigh Country Club with guest speaker, Chris Snider, CEO of the Exit Planning Institute. The title of the presentation is “11 actions an owner must take to rapidly grow value and unlock wealth.” RSVP is required at www.compasspt.com/events-seminars.