Solving The Catch-22 of Your Business Model

Start-up entrepreneurs, independent professionals and business leaders may be equally deeply passionate about their product or service model. Despite, or in fact because of that passion, their success may be at a stand still.

In the late 1990s I worked with a woman who had a brilliant cosmetics idea that had HSN (the Home Shopping Network) interested. In order to play to that audience, the product needed to be displayed in a fashion other than the one the entrepreneur wanted. She was adamant. It was her baby after all. More than 20 hours of explaining and cajoling and analytically demonstrating the potential for sales if done "the HSN way" produced no shift in her devotion to her model.

The boxes of her prototypes are sitting on her closet floor.

So what's the Catch-22?

If you are completely, absolutely, positively set on your model, be it fixed OR flexible, you're not running your business, it's running you.

There is NO single best model to use - every model is a blend of the internal forces of the personality, decision making, skills and processes, and of the external forces where that effort is aimed.

What sets successful businesses apart from the ones that are languishing is that the key decision makers step back from the market, the product, the model and re-check whether the formula they are currently using is getting them the result they say they want: profitable growth; competitive differentiation; stability; and so on.

Contrast that with the jewelry designer whose original model was "I need to make every piece because they must be made exactly the way I want them to be." However, she hated making duplicates, so her business was stalled. She was willing to test a new model. In four hours of our discussions and one month of research she located people experienced with the materials she used in her jewelry making who could demonstrate their ability to reproduce her pieces exactly the way she wants.

Her jewelry is now being sold in Hawaii, California and Canada.

The President of a business in transition from one generation to the next informed me flat out that they couldn't change the model for how they market or package and provide services "because everyone else in the industry does it this way." He and his management team were unable to imagine a single other way to package their expertise to change the game. In a single brainstorming meeting with the management team, I was able to suggest six ways to do so. In the second meeting I was able to walk them through the entire discussion of the pros and cons of each and they outlined what the required changes in materials for sales, sales training scripts, and customer service activities would need to be if they decided to pursue it.

Now they'll need to decide which are the High Payoff targets they'll pursue.

My attorney client "Mike" called this week and said "I'm sick of training, I want a different model!"

I've been working with him on the management skills he needs to develop using his current model: bringing in entry level junior attorneys to grow and expand his legal service offerings. The root of his decision is that his market is changing and he wants to establish a firm that can flex to meet the regulatory and seasonal waves that influence the flow of work coming to his firm while also growing the business.

He's tested his first model, the time and content of the training he needed to commit to bring a less experienced person up to speed. He created a way of evaluating the trade off between time and effort, and so on. In reaction to the experience he's having with training, he's now asking himself if he'd rather bring in much more experienced and much more expensive lawyers to build his business.

I'll be working with him to explore that approach, to test it, analyze it and learn from it.

If you're completely fixed, you're not testing where opportunities, efficiencies, and profits might come from.

If you're relentlessly flexible you're probably not gathering enough information to identify where you could be more systematic in order to gain efficiencies that will make you profitable.

If you found yourself wincing at the idea, it's probably time for you to step back and challenge your model.

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