Saturday, 25 October 2014

Beware of the foolishness of change for the sake of change

Change is great. We all love to see people try to improve things. Where would we be without adventurers and risk-takers? If you are in search of glory or wish to make a fortune, it obviously pays to be first. Nevertheless, during an economic depression, it can happen that early birds just get eaten first.

Prudence is crucially important


That does not mean that we should be sceptical about innovation, but only that, when money is tight, it is advisable to be extra careful. If you are running a business these days, you are probably watching your cash-flow like a hawk. Well done. My guess is that, right now, you need to make a major mistake like you need a hole in your head.

Managing a company in recession mode demands more of the ant than of the grasshopper in our souls. When the market recovers, there will be plenty of time for taking bold risks. In the meantime, a miser's frame of mind might be what you need to ensure business survival. In my view, in difficult times, one should keep in mind the following three principles:

Rationality is the way to happiness  
Go for the easy catch


If you are running a specialist service company in Minnesota, forget about the Chinese market for the moment. Chances are that you'll be able to detect better opportunities if you concentrate your attention on people next door. Transportation costs money and communication takes time. In times of deep economic trouble, I believe in focusing all efforts on the easiest markets and putting aside, temporarily, risky expansion ideas.
Consistency: The key to permanent stress relief
Deliver high-quality work


If you are delivering services, such as painting houses, what level of quality should you try to achieve? How often do you give grounds of complaint to your customers? If your answer is never, you are doing great. If not, that might be good news as well. Quality improvements, as perceived by customers, often involve negligible costs for business. Delivering impeccable quality saves you money. For this reason, during an economic recession, I wouldn't recommend launching new products with potential quality problems that might take you down beyond hope of recovery.
The 10 Principles of Rational Living
Spend money wisely


An economic recession blurs the line between fixed and variable costs, production and overhead. When money is tight, you need to take immediate decisions about where your cash is going. Evaluating every expenditure as an investment is a technique that brings about outstanding results. Is your inventory going to make you a profit within the next two months? Which steps of your process could be eliminated without negative impact for customers? In periods of crisis, one should eliminate investments in new technologies with long payback periods, since they might eat up the cash that you need to survive right now.

When you look around and see people going bankrupt, it is not unwise to become risk-shy. Before you explore new countries, take a walk down the street. Before you invest in new technology, make sure that you can afford it. Before you take additional cargo, stabilize your ship. One day, hopefully soon, the storm will be over and we will be able to go back to plain sailing, bold innovation, and massive expansion.


For more information about rational living and personal development, I refer you to my book The 10 Principles of Rational Living

[Text: http://johnvespasian.blogspot.com]

[Image by robstephaustralia under Creative Commons Attribution License. See the license terms under http://creativecommons.org/licenses/by/3.0/us]

Rational living, rational working

How you succeed at one thing is how you succeed at everything

"Love goes towards love, as schoolboys from their books," wrote Shakespeare in Romeo and Juliet. Since the 17th century, times have changed to remain essentially the same. Is it not a force akin to love that moves customers in the direction of their favourite product? Or spectators to watch every game of their preferred team?
Rationality is the way to happiness 
The two primary success factors

Luckily for us, modern men and women, hundred of years of accumulated science have identified the keys to success in romantic and business undertakings. Is it not high time to proclaim that marketing wisdom has rendered Shakespeare's plays obsolete for didactic purposes?

Theatre might continue to exist as harmless entertainment for summer nights, but when it comes to learning dating and salesmanship, you are much better served by the teachings of hard science. Won't you agree with me that only fools would refuse to adopt a proven formula that knows no contrary views? Here is my condensed version of modern marketing truth:


When everything  fails, try this
1. A clear idea of what you want


An entrepreneur promoting a new product or service would be ill advised to walk around blindly trying to convince everybody he meets to make a purchase. Most likely, in that way, he would just waste his resources and make no sales at all.

Like in dating, efficient salesmen establish minimum requirements for their prospects. If you identify your prerequisites in advance, you will be able to discard quickly anybody who doesn't hit the mark. Draw a sharp picture of your target and focus your marketing energy like a laser.

The 10 Principles of Rational Living
2. Thoughtful persistence


Investors know that the best kind of assets are those who produce long-term compound growth with little risk. What you want to avoid is a situation where you must continuously shift your money from place to place. Even if you manage to make a decent return on your investment, the need to reinvent the wheel every day will leave you too exhausted to enjoy life.

Effective start-up marketing is about acquiring a few enthusiastic customers who tell their friends about the unique experience that you can provide. In the case of dating, it is even more important that uniqueness in the being goes along with consistency in the telling. From this perspective, dating is a one-number game and marketing is the same.

Anyway, should the scientific formula fail, you can always go back to classical theatre for inspiration. Marketing is, in a way, distilled philosophy, an almost exact discipline as you know, or as Shakespeare wrote in his most famous play: "Hang up philosophy, unless philosophy can make a Juliet!"


For more information about rational living and personal development, I refer you to my book The 10 Principles of Rational Living
 

[Text: http://johnvespasian.blogspot.com]

[Image by SearchNetMedia under Creative Commons Attribution License. See the license terms under http://creativecommons.org/licenses/by/3.0/us]

Rational living, rational working