Today, across the world, threats to businesses are escalating.
Floods in Germany and China, fires in Oregon and Siberia, riots in South Africa, France, Lebanon and Belfast all threaten the existence of lives and businesses. Years of investment, care and effort can be eliminated in hours.
Building a business needs to take on a different meaning in such a world. In this podcast from The Money Show, Pavlo Phitidis shares some thoughts on how to get this done:
Understand why you do what you do
Expanding your definition of value from your business is essential to adopt the strategy that I will share below. Meaning matters, purpose must be intentional, you need clarity on your economics and if you have the courage of conviction, stretch it into defining your life’s purpose. This helps build up conviction to fight necessary allies when under threat. It also helps improve foresight, equally useful when undertaking the endeavour that follows.
Understand the value in your business
I use the “Onion Method” to evaluate where the value lies in a business. The inner core holds the deepest value, that without which, you have no business. This is where the strategic, core competence of your business is shaped, identified, named and measured. The middle layer represents everything non-core to your business’s existence, but is strategically important to have in order to function and grow. The outer layer is everything else, defined as non-core and non-strategic. Without the outer core, you can easily continue to operate and function.
An example helps here.
|Restaurant||Customers, recipes, menu, suppliers||Interior, tables and chairs||Napkins|
|Die Maker||Software, designs, contracts, customers||Factory, plant and equipment||Steel|
|Data Analytics||Customers, skill, software, design||Computing||Offices|
Incorporate your value into virtual form
Customers remain central in all cases. Containing, holding and developing their data is essential. For example, a restaurant facing a non-renewable lease, owns its customer database and can establish elsewhere by notifying them. The Die Maker holds the Dies and can make new ones from a temporary factory. The processes you have that support growth and delivery from marketing, sales, operations and administration – the stuff that brings a business to life – can be incorporated in systems, lists, manuals and software. With that you can get going again.
Invest in protecting your value appropriately
Protecting your value is next. Insurance protects against cyber threats, to fire, flood and riots. This becomes a key contributor to your asset of value.