The high cost of doing nothing
18 August 2021
“In any moment of decision, the best thing you can do is the right thing, the next best thing is the wrong thing, and the worst thing you can do is nothing.” (Theodore Roosevelt)
The scale of economic change brought about by the Covid-19 pandemic has forced many business owners to assess the way they operate and pushed them towards considering new technology to improve efficiency and productivity.
And yet, despite recognising the need to invest, many business owners are still reluctant to make a decision….why?
The impact of doing nothing
The safe option is to always ‘do nothing’. It’s a very popular strategy. Inertia and denial are the real enemies of business owners. It is an uncomfortable truth that we all use a myriad of reasons why not to do things; mostly we use the excuse of not enough time or money.
But it’s important to think about what will happen if you choose to do nothing.
When a business and its people find ways of doing something that works particularly well, they have strong incentives to lock in that process and stop searching for alternatives. But these established processes become rigid, and people follow the process not because it’s effective or efficient but because it’s well known and comfortable.
The world around us is constantly changing and the impact of Covid has dramatically accelerated this rate of change. In February 2020, how many businesses were regularly using Zoom for client meetings? And now, in August 2021 how many are not?
Businesses who are not prepared to change and invest in new technology are allowing their systems to erode before their eyes. This gradual loss of efficiency and effectiveness will ultimately have the following impact…
1. Loss of customers
If it is easier to buy from your competitors, then your customers will vote with their feet. Since the pandemic, purchasing behaviour for both B2C and B2B customers has changed immeasurably. And businesses that deliver a streamlined customer experience through better use of technology are the ones that are succeeding in this new world.
2. Loss of staff
To retain your most dynamic people they need to feel valued, challenged and motivated. If they perceive that their employer lacks ambition and is not prepared to adapt and invest in new technology to improve, then they are more likely to look for an employer that does. This can be further compounded by the staff that do choose to stay, as they are likely to be the ones content with the status quo and happy to maintain minimum standards of performance and productivity.
3. Loss of profit
If your staff are constantly dealing with workarounds and fixes for ineffective systems and processes, they are not spending time on activities that are more likely to generate revenue and profit. In business, time is your most valuable resource and if it is being wasted because there has been no investment to improve process then you are limiting your profit potential.
So what do you do?
1. Embrace risk
For a business to succeed it must respond effectively to changes in its environment. This inevitably requires making decisions, and with every decision comes an element of risk. But like it or not we cannot avoid risk and the biggest danger to a business is to try and avoid risk by doing nothing.
As a business owner you need to accept that risk is a part of life, and it is the role of a leader to embrace risk and use it to drive growth and innovation in your business.
2. Challenge the status quo
It’s the business owner’s responsibility to create a culture where challenging the status quo is encouraged. This means adopting a forward-thinking, growth mindset; a state of mind that doesn’t settle for the bare minimum and instead looks for insights on how things can be improved.
The first step is identifying how the business actually operates. What are the tools and processes that make the business tick? Map your main business processes and use these maps to interrogate the status quo and look at how you can disrupt, innovate and improve. It might be through adopting new technology, or it might be using the same tools in more effective ways.
3. Build in a review cycle
Once you have identified areas of improvement it is very important to trial and evaluate the impact of the new activity before making the decision to roll it out across the business. If the decision includes investment in new technology, then it is a case of trialling the new technology within a single division of the business and measuring the results.
Most project management methodologies include a review and evaluation. Choose one that works for you. In our business we use Scrum, an agile project management methodology with an inbuilt review and retrospective cycle.
For the review process to have any value, you first need to know what good looks like. That means having data on productivity and performance before the decision was taken and then the ability to measure impact afterwards.
No one wants to reinvent the wheel all the time. It is much easier to simply repeat what we know and be comfortable in the belief that we are good at what we do. But when your environment changes and your competitors adapt you are putting your business at risk if you choose to do nothing.
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