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How you think about your business is how it develops

Reflecting on many business discussions, there is a consistent pattern that correlates the present to the future. 

How you look at the world, shapes the world to that outlook. To use a current example, a combination of cognate dissonance and confirmation bias at work across social media on the issue of vaccines. 

How you understand your business is driven by how you choose to see it. It is a choice. Listen to this podcast from The Money Show as Pavlo Phitidis illustrates this using the example of 2 clients.

Both are in the same industry and have similar business metrics. The deal in home furniture design, manufacture, and distribution. Both employ around 80 people, both exist in very competitive markets, and each is having a very different outcome.

Company 1 – Jack

The business owner came out of the supply chain and procurement department of a corporate furniture manufacturer. He found himself there after several years on the manufacturing floor. At 38 he started his own business with a good understanding of the supply chain, relationships.

Company 2 – Jill

She had started this business at 27 out of her parents’ garage. She did so to pay for college and contribute to his family home. She designed the furniture, made it and distributed it mostly through smaller, independent furniture stores. Over the last 3 years, she found access into bigger stores and chain stores too.

When I asked both business owners what made them special, they gave me very different answers.

One said, the materials, fabrics and chassis upon which the furniture is built, the manufacturing process and the factory floor layout with its plant and equipment.

The other said, the sales representatives who had relationships with the customers who bought the furniture. They influenced the design and manufacturer of the furniture.

The one business enjoys steady, consistent sales and the other struggles, finding traction hard to sustain.

When I first met Jack, he took me around his factory and spoke to me about the various fabrics and imitation leather materials. He showed me a cnc lathe that could cut out the fabrics based on his CAD furniture design software.

Jill spent a short amount of time with me at her factory and then took me out visit 4 of her retailers. She had asked that we meet on a Saturday and then spent all the time talking about how the shoppers in the retailers behaved and how that informed all her decisions.

Can you guess who is growing and who is struggling?

Both are smart, experienced, and hard working. Both are determined and well connected.

When I ask Jack what challenges has he faced and how he overcame them, his answers all centred on product. Jill’s all centred on her customers, customer behaviour.

A business exists for only one purpose: To solve a problem for a customer by providing a great experience. When you see and value your product, before you see, understand and value your customer, their problem, and the experience they wish for, all your responses to business challenges will be wrongly orientated.

You can build a better mousetrap, but the world won’t beat a path to your door, if your customers own cats.

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