Friday, December 20, 2013

Science of Business -- Gravity

Gravity

Gravity is all around us.  It is part of everything we do every day.  So what exactly is this thing called Gravity.

Let’s start with the definition.  Gravity, according to the Collins Junior Dictionary, is “the force that makes things fall when you drop them.”  Now that’s pretty simple.  It doesn’t take being Isaac Newton to realize that apples will always be falling from trees.

So what does falling apples have to do with business?  Glad you asked. 

Think of your business as a very large apple.  That apple is resting in your hand.  Lift up that apple until your arm cannot go any higher.  OK.  What are you now doing to that apple?

I imagine everyone is thinking “holding up the apple”.   You are correct but what are you actually doing to keep that apple up in the air?  Would you believe you are actively pushing the apple upwards? 

Yes, that’s right.  The effort you are expending to hold the apple in the air, assuming the apple is motionless, is just enough effort to counter the force gravity is applying to the apple to make it fall to the ground.  You are literally pushing the apple up continuously in order to keep it from falling.

Your business operates according to the “Laws of Gravity”.  Regardless of whether your business is large or small, it is subject to the same laws of gravity as the apple. 

In business, there are only 2 directions allowed: up and down.  The apple is either lifted in an upward direction or it falls to the ground.  Your business is either being “lifted” up by the efforts of the employees or it is “falling” to the ground.  Nature does not allow for a business to operate at an equilibrium state for any length of time.  In other words, you cannot have sales or production at a flat level for any length of time.  In business, there are no exceptions. 

So what does it mean to “lift” your business?  Active engagement in the growth of the business “lifts” the business up and keeps it growing.  Look at your sales figures.  Are they going up or going down?  How about your revenue numbers?  In fact, if you look at all the various statistics used to measure the success of your business, there are only 2 directions you will see in anything but a shuttered company: up and down. 

The more active the employees are at “lifting” the company, the higher the sales figures and more likely the company becomes successful.  The importance of contributions from every employee are not to be overlooked.  All of us have probably known of employees who loafed about on the job and really did not put forth a great deal of effort in doing the best job they could.  These types of employees effectively add to the overall weight that the balance of the employees must overcome in order to keep the company going up.  Get too many employees riding on the shoulders of others and soon the “shouldered” employees start to get dropped; figuratively and literally.  When a business suffers drops in its sales numbers over a sufficiently long period, staff reductions are inevitable.  Thus, the dropping of employees comes to pass in the form of layoffs; there are not enough “lifters” to compensate for the loafers. 

As a business owner, if you drop a lifter from the company, you have made the problem worse.  It is vital that every business recognize who are the lifters and who are not.  Who are the really heavy lifters and who are the lightweight lifters?  Should it become necessary to reduce the number of employees, it is critical to the business to start with the loafers, then the lightweight lifters and then the heavy lifters.  Look at the statistics for each employee to determine where each employee fits on the scale of “lifters”. 

So what in the business world constitutes gravity?  What is it that all the lifters are lifting against?  In simple terms, competition and noise. 

Every business has competitors.  These competitors are actively seeking customers just like your business.  How much effort you must expend in order to counteract their sales efforts depends upon the overall market size and your company’s size relative to your competitors.  The more competition you face, the more gravity is present working against your lifting efforts.  If the overall market is large and you face a lot of similarly-sized competitors, your lifting efforts will not need to be as large as that of a small business competing against very large competitors.  The key is to recognize what market you can successfully play in given your lifting power and the gravity imposed by your competition. 

Look at what happens when a Wal-Mart, Home Depot or Barnes & Nobel moves into town?  These behemoths can present formidable competition yet the nimble businesses in town - recognizing the “gravity” they present - looks for ways to shrink the target market to a size where their lifting capacity is greater than that of their competition.  Specialty retailers are often unfazed by the introduction of a “big box” retailer.  The really clever retailer takes advantage of the situation and promotes his unique products as “special” and “personalized”.  In other words, the smart business reduces the size of the target market they are trying to “lift” to something of a size that allows their current lifters to continue to overcome competitive gravity. 

Along with competition, the other component of gravity is noise.

Noise is the cumulative distractions that all of us encounter in our daily lives.  The deluge of advertising, radios, televisions, ringing phones and the general status of the economy all contribute to the overall noise level through which a company’s messages must emerge.  How does the right message get to the right person at the right time in order to bring about a realization that whatever you are selling is something needed?  If your prospect is looking for a solution, the task is easier.  If the problem you are trying to solve is not yet known, the task is much harder. 

It used to be that what are considered noises today were once considered sources of valuable information.  TV ads were informative.  Now we TiVo our way through them.  Radio shows were sponsored by a single vendor whom everyone knew.  Now we have subscription radio so we can avoid the ads.  Newspapers were the primary source of news about the world around us and now the Internet allows for easy access to more news than any of us are prepared to digest. 

So how do you combat the noise factor.  Networks.  Social networks, referral networks and business networks.  When ads are generally distrusted, consumers turn to friends and colleagues for insights.  They look to someone they trust to give them guidance.  The Internet provides instant access to thousands of viewpoints about almost everything that is for sale.  Consumer Reports has been replaced by social network sites such as Facebook, Twitter, Yelp and YouTube.  Clever usage of these tools can result in customers becoming advocates and helping in the lifting efforts.  Does that mean traditional advertising does not work?  No.  It means that you need to be asking your customers how they found out about you (survey) and track any changes in behavior.  You may be surprised to find out that a great many of your customers included on-line research in their buying decision process.  If you are not building your “network”, you may be missing a lot of opportunities to secure customers. 

Thus we have the 2 sides in the battle for business success; the lifters and gravity.  The simple fact is that as long as the capacity of the lifters is greater than the forces combining to create gravity, the business will be successful.  Allow gravity to get the better of your company and without immediate action, the business will fold under the weight.

Do you know who are the lifters in your company?

As always, if you would like help implementing these ideas in your business, please call me regarding available consulting services:  602-492-1088

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