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Going into business of any kind always proves to be a complex endeavor, one that requires a balance of anticipation, communication, and perseverance to succeed.
Unfortunately, many newer and more seasoned business owners have a fear of failure that inhibits them from finding or even continuing the success of their organization.
As a business leader, the fear of failure is truly a debilitating experience, so much so that it can ultimately cause failure, believe it or not! Although the feeling of fear is a primordial human instinct for basic survival, allowing it to dictate your decision making in our contemporary business world leads to the fulfillment of that fear.
My goal throughout my career has been to help alleviate the fears that business leaders feel regularly. In doing so, I have formed an outline of the most common reasons that businesses fail. In doing so, business leaders can then develop an Anticipatory mindset that more easily overcomes what they are afraid of before it tears them down.
There are 7 main categories of common business failures I have identified in the past. In one way or another, you are aware of at least one of these and have either experienced a setback as a result or are caught up in a flurry of worry about when it might disrupt your organization.
Here is a short description of each:
Failure to anticipate – I have found that many companies react to change with agility after a foreseeable disruption instead of anticipating where their industry is headed.
Failure to communicate – Communicating should be a two-way exchange of ideas that leads to Anticipatory action; however, many leaders tend to inform in a one-way fashion.
Failure to collaborate – If you do not include others in the decision-making process, you risk failure by limiting the potential for new ideas to take the spotlight.
Failure to innovate – A lot of businesses are stuck in their ways or they are on a mission to preserve the status quo, which means they pass up innovating for a variety of reasons.
Failure to pre-solve problems – Problems always start as something perceived and then quickly develop into a reality. Waiting for the problem to occur leads to failure.
Failure to de-commoditize – Copying a product or service that has already saturated the market does not set you apart. It simply puts you at the back of the line of great mimics.
Failure to differentiate – You can and should find a way to evolve and stay different, though many believe that transformation means abandoning customers.
Now, let’s see how some of these actually pair together to give you the advantage!
It is so easy to be reactionary and agile when disruption and change occurs. If you have a lock on your industry and the product or service you bring to the table, why adjust your strategy? But the sad reality is that reacting to disruptions after they occur is always a poor decision.
Anticipation is the option often missed, and by pairing it with pre-solving problems, you have a strategy to avoid common failures! Business leaders must first recognize and separate what will happen from what might happen by practicing my Hard Trend Methodology. This strategic decision-making process allows you to actually see the problems you face with every decision you make long before they are a problem!
Spotify is a great example of pre-solving problems in Anticipatory fashion. Similar to their competitors like Apple Music, Spotify is a music streaming service. However, due to the increasing cost of royalties — a Hard Trend — Spotify has chosen to alter their business model and start their own music label that promotes artists exclusively on Spotify, propelling them into the future of music.
Both the areas of communication and collaboration must be two-way streets where each department shares ideas and contributes to the conversation. If business leaders limit operations to reflect their own perspective, they miss a ton of information and opportunities.
Instead, think about how useful it would be to have a seemingly endless pipeline of potential! When you invite open collaboration between employees and ensure that the communication process is inviting, you unlock revolutionary innovation opportunities.
By today’s standards, this also means utilizing a multi-generational workforce, as I have written about recently. This relates to the intersection of the experience and expertise of older generations with the new ideas and perspectives of the younger generations.
All of this is prevalent at Zappos, an online retailer where fitting into the company culture of open-mindedness and creativity is a must. To ensure progressive innovation, they always foster a cross-functional team that communicates and shares ideas, constantly keeping them ahead of the disruption curve and above common failures.
Lastly, let's pair the final two would-be pitfalls that affect many organizations: de-commoditization and differentiation.To de-commoditize in business means to pursue something other than what is already being done, and to differentiate means to set yourself apart from the competition.
Believing that you are “indispensable” to an industry is the most common area where failure takes its toll. This is the ultimate in resting on your laurels, which is something no company should ever do! If you and your competition simply battle one another over the same product, why would customers choose you?
I always find that commodity industries are the perfect example of this. There is arguably very little to differentiate between companies in a commodity industry, such as internet service providers. Since they all offer the ability for us to connect to the internet, they are constantly fighting over who has the lowest price to win customers.
For companies like Spectrum or AT&T to de-commoditize themselves, they must differentiate in some way, finding a product or service that they can offer that none of their competition can. Often, what this pertains to is my Anticipatory methodology of going opposite, where an organization takes the road less traveled to find significance in a saturated market.
Let’s go in a different direction with this example. Hermes is a clothing and accessories brand, which we all know there are tons of, right? Though, Hermes stands out for their exclusivity, which might seem like the opposite of what many companies aim for today, especially in apparel.
Hermes prides themselves on their high-end quality and craftsmanship while emphasizing limited availability. They make limited amounts of inventory, and this scarcity not only represents a unique item worth obtaining for many, but it also sets them apart from the extensive competition in textiles that offer endless supplies of less exclusive outfits.
In essence, fear of failure leads to failure itself. Fear is debilitating, so instead of fearing what is to come, you need to embrace the future and look forward to what is to come. We all live in the future right now, and what comes next is something you can predict more than most realize.
Anticipate the future, collaborate and communicate with your staff, and be sure to effectively de-commoditize and differentiate your products and services. Suddenly, the fear of failure is revealed to be just a fear of the unknown. As one anticipates, the 'unknown' becomes the 'known'.
Daniel Burrus is considered one of the world’s leading futurists on global trends and innovation. The New York Times has referred to him as one of the top three business gurus in the highest demand as a speaker. He is a strategic advisor to executives from Fortune 500 companies, helping them to accelerate innovation and results by develop game-changing strategies based on his proven methodologies for capitalizing on technology innovations and their future impact. His client list includes companies such as Microsoft, GE, American Express, Google, Deloitte, Procter & Gamble, Honda, and IBM. He is the author of seven books, including The New York Times and Wall Street Journal best-seller Flash Foresight, and his latest book The Anticipatory Organization. He is a featured writer with millions of monthly readers on the topics of innovation, change and the future and has appeared in Harvard Business Review, Wired, CNBC, and Huffington Post to name a few. He has been the featured subject of several PBS television specials and has appeared on programs such as CNN, Fox Business, and Bloomberg, and is quoted in a variety of publications, including The Wall Street Journal, Financial Times, Fortune, and Forbes. He has founded six businesses, four of which were national leaders in the United States in the first year. He is the CEO of Burrus Research, a research and consulting firm that monitors global advancements in technology driven trends to help clients profit from technological, social and business forces that are converging to create enormous, untapped opportunities. In 1983 he became the first and only futurist to accurately identify the twenty technologies that would become the driving force of business and economic change for decades to come. He also linked exponential computing advances to economic value creation. His specialties are technology-driven trends, strategic innovation, strategic advising and planning, business keynote presentations.
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