Monday, May 27, 2013

Is Your Business Reactive or Proactive?

Business moves at the speed of communications. Excellent communications lets your firm get and stay ahead of the competition. Some businesses only interact with their customers after a change in the marketplace. The more successful firms are those who move the market.
Proactive businesses thrive at the expense of reactive ones.
Reactive firms are like surfers who sit inside the break line. A big wave comes and swamps them. Proactive firms are like the surfers who sit on their boards outside the break. When the big swells come, they are ready to go for a long, exhilarating ride.

Is Your Firm Reactive?

Reactive firms are those who wait for their competition to make the first move then respond. An example is a company that is the only one of its type in a given territory. One day, a second firm opens its doors. The first firm only takes action—it reacts—after its competitor arrives.
Another example involves technology. Does your firm still use fax machines? Do your clients?
If so, you and your clients are living in the past when facsimile machines were standard practice. Now email is far faster and offers better quality  than faxes. Faxes are poor quality (150 dots per inch) black and white only. Screen resolution is 72 dots per inch, but with millions of color possibilities. Screens—and emails—also have the option of attaching documents of at least 300 dpi, which is the minimum standard for quality printing.
One example of how this quality shows up is sending images to clients and potential customers. If you want to send yellow text on a red background, it will look colorful in an email. It will look like gray mush in a fax.
Ah, so you finally equipped your sales staff with laptops? Good for you … except you’re behind the times.
Today having a sales force with cellular tablets—ones that can connect to the Internet and thereby send orders directly to you—is the wave of the present. Tablets have screens large enough to be readable but small enough to fit in a purse or small satchel.
Reactive firms are stuck in the past, both technologically and in their mindsets. “The old days were good enough for us” is their mentality.

Is Your Firm Proactive?

Proactive firms are ahead of the curve, not behind it.
These firms are constantly aware of what their competition is doing. They also make steps to protect their territory by asking questions of current and potential clients. Proactive companies take steps to make it unprofitable for anyone else butt in.
Proactive firms are those who were among the first to adopt the latest technology. They look at new hardware products—tablets for example—and software—like Pinterest—and see how they can serve the company’s needs. They are also keeping their eyes on emerging technologies and threats for potential impacts good and bad.
Instead of shrinking their business, proactive firms are looking to expand it. This expansion might include broadening the physical scope of where they operate, such as going from one city to an entire state. The expansion may include broadening their product and/or service lines, adding kid’s wear to a firm that traditionally only sold women’s clothing.
Proactive firms are active in the present and looking at the future. “Yesterday was OK, today is good but we will make tomorrow even better” is their approach.

Moving From Reactive To Proactive Starts With SWOT

How can a company move from being reactive, responding to intrusions into their sales territory by either abandoning it or taking action when it’s too little, too late?
Start with a SWOT analysis. SWOT stands for strengths, weaknesses, opportunities and threats. Honestly examine your own firm. Also look at your top competitors and those on the rise.
Where are your strengths? What do you do better than everyone else?
What are your weaknesses? What does each competitor do better than you? Where do other firms out perform you?
Where are there opportunities for you to become more efficient? Where are there places for you to grow?
In what areas are you seeing sales reductions? Where are you seeing drops inefficiency, an increase in customer complaints, a decline in morale?
Don’t say that the current approach is adequate. Constantly ask yourself, “How can we be better?”

There Are Costs In Money, People And Pain

Going forward—growing—is a painful process. You are going to spend money and you may well lose a few long-time employees in the process.
Consider this example. Your SWOT report says it’s time to dump the one centrally located black and white copier you’ve had for 5-10 years and replace it with several smaller printers closer to where people work. If you follow that course of action, you will dump an older piece of equipment. You will also end a business relationship with the firm servicing your copier.
Hiring relatives or friends is always a bad move, no matter how well qualified they are. There comes a time when they get too comfortable and start under-performing. They also may not respond positively to your criticism and performance review.
Use the result of your SWOT analysis to look at ways to move forward. This may mean:
·         Bringing in an outside evaluator to assess each person’s performance. Consider including top management in this evaluation. Is this the right person for their current job? Is someone else better qualified in terms of knowledge, experience and personality for this position? Is this person being underutilized in their current occupation?
·         Evaluate your business relationships with other firms. Are they providing the goods or services you need in a timely manner? Are they providing them at a good price? Is a slightly higher price or slightly longer delivery compensated by consistent products and services?
·         Evaluate your current markets. Compare your progress over time both to your firm and to your competitors’. Are you moving faster than they are, or are you falling behind?
·         Where can we grow?
·         Use social media, such as Facebook, to ask the public, “how can we improve?” You just might get some product ideas you hadn’t considered. Even in a worst case scenario, many people will respond positively because you are asking them for their opinions. You don’t have to act on them, but at least consider what current and potential customers say.
This knowledge m ay well mean ending some personal and business relationships. Long-term employees may be reassigned, asked to retire or fired. Other people may be given a heavier workload without any additional compensation.
Cut out the deadwood—the people who are being paid for doing nothing—and bring in people wanting and willing to work. Get people who are excited to come to work, not those who are more excited about going out for a beer after hours. Make the workplace fun and exciting, not full of stress.
Ask a woman if giving birth to her children was a very painful experience. She will say yes … but the results are worth it. The same thing applies to growing your business. It’s painful but in the long run, your firm will be better for it.
Use your data to make a plan for growing your business.

Use Your Data To Make A Plan

Information filed in a drawer or stuck in some folder on a server is worthless if it is never used. Use the results of your SWOT analysis and any comments from outsiders to create a plan.
Have immediate, moderate and long-term goals and objectives plus plans for achieving them. Make the goals realistic and achievable. If the goals are too outlandish, you can never accomplish them.
On May 25, 1961 President John F. Kennedy said the U.S. should have a man on the moon by the end of the decade. On July 21, 1969, Neil Armstrong fulfilled Kennedy’s promise.
Landing a man on the moon was the long-term goal. The immediate task was creating an organization and infrastructure to make the end goal possible. Kennedy used an existing organization—NASA, founded in 1958 by President Dwight D. Eisenhower—for this purpose.
If your goal is to double the number of products you sell, start by using your marketing and sales department to determine which products best fit those currently being sold.
Kennedy’s intermediate goal was creating the vehicles necessary to achieve the final goal of landing a man on the moon. Your intermediate goal may involve adding (and training) staff and equipment to achieve your goal.
Kennedy’s long-term goal was achieved only after the short- and long-term goals were reached. If you use and existing department, or create a new one, then staff and equip it, you can reach your goals.

Be Flexible

Military officers will tell you that no battle plan survives contact with the enemy. In the war of business against business, a competitor’s action may make your new business plan obsolete.
For example, if you are planning to market a new line of active wear aimed at older adults, and your number two competitor beats you to it, pause for a second. You might well decide to continue with your own plan as it is. Alternately, you might make some changes to take advantage of holes in what your competitor is doing.
Older adults, for example, tend to get most of their information from traditional media sources such as print publications and broadcast media. If your competitor is only advertising on social media and ignoring print, you’ve got an opening to skewer them royally.

Create A Plan For Creating Plans

Having a plan for creating action plans allows you to move faster than creating each action plan individually.
Start by working backwards from your long-term goals to your intermediate goals to your short-term goals. You already know where you are. After determining your long-term goals, you know where you want to go.
With start and ending points in hand, and a flexible mindset, create the policies and procedures needed to achieve your goals.
Once you’ve created a rough plan, ask your staff for feedback. Ask the people who will do the work these questions:
·         Are our goals achievable? Why? Why not?
·         Are there steps we can eliminate to save time? Are there steps we should add to protect ourselves?
·         How would you change this plan to make it more effective?
Once you’ve gotten feedback, consider rewarding people whose comments made a difference. Everyone likes a reward so people may try harder if they have something to gain.


Being proactive means taking steps to move forward, not sitting around waiting for someone else to act.
Proactive firms are constantly seeking to improve and expand. They conduct regular SWOT (strengths, weaknesses, opportunities and threats) analyses both to see where they are and how they can get better.
Consider the human element, not just the facts. People are going to be impacted by your actions.
Be organized. Create a plan for creating plans so you can respond faster to threats and new opportunities.

No comments:

Post a Comment