Category Archives: Tactics

Try and Try again – or maybe not? Persistence pays.

When I was a child, my parents often exhorted me to “Try & Try again” if I failed at something.

In business, all too often I meet companies who, when something is suggested, respond with “Oh that doesn’t work – we tried it some time ago and it failed”

If you dig into that & get them to recall the details, it’s amazing what you can find.

A direct mail campaign didn’t work for us

Well, in fact you only sent one piece of mail, to a small selection of your past customers

We tried using a different system

This is one of my favourites. In general people are resistant to change and prefer to do things the familiar way. If they aren’t convinced of the need to change, your team will prefer to see the new system fail.

It was too complicated

Well, it might be, but it is more likely that the proposal wasn’t broken down into its component parts. You can eat an elephant, one mouthful at a time, but if you start with the whole elephant on the plate it can be a bit intimidating.

Most of the time, business don’t try often enough or hard enough. They are not convinced of the strategy, and go into it half-heartedly, then withdraw at the first obstacle. That’s a recipe for failure.

If you are going to try something new, research it, plan the steps, and then execute it whole heartedly, with real commitment from the leaders of the business.

You could still fail because your strategy was incorrect, but most of the time Initiatives fail for poor execution, not faulty strategy.

 

Strategy or Tactics?

Many business advisors bandy around the words “strategic” and “tactical” but for me, the only real difference is the timeframe.

There will be times when you have to take a decision to solve today’s problem, but it comes back to haunt you at a later date.

It’s a bit like buying something you can’t really afford on a credit card. If you are not careful, you end up paying for it twice over (or more) by the time you’ve paid the interest.

A client of mine has been approached to sell his business, and I am helping him through the process and we are providing information to the buyer.

One piece of (quite important) information is the share structure and ownership of the business.  The MD and his wife are the majority owners, but two key employees (Nick & Bob) were given a small shareholding many years ago.

When the MD declared the shareholding, he included Nick & Bob as owning 5% of the business each, but when I looked at the accounts there were far more shares that he had declared.

Several years ago, when bidding for a large contract, a director’s loan was converted into share capital so that the business could obtain finance. 

The MD had forgotten all about that transaction. It had to be done at the time, his money was already committed to the business, and it didn’t matter to him.

But Nick & Bob don’t own 5% of the company each, they own 0.05%.

This business will sell for about 5 million pounds; Nick & Bob will receive a few thousand pounds instead of the £250k they would be entitled if they still owned the 5%.

If my client wants to do the honourable thing and give Nick & Bob the difference (I am sure he will) then taking into account the various tax implications he will be about 500k worse off.*

If, after taking the undoubtedly short term decision to convert that loan to share capital, the MD had thought through the implications for Bob & Nick in the longer term, there would have been a way to make sure they still had the 5% he had promised them.

So when the answer to the short term problem is obvious, and you just get on and do it, try to take a step back every so often & ask yourself the question

 “How will that affect me / us / the business in 3 years’ time?

*(Now I think I have a solution for this problem – I just need the corporate lawyer to check)