How do we overcome problems in business?

Look at problems.

What do you see when you look at a problem? What if you were a dentist, and tomorrow someone invented something that gave everyone perfect teeth? What if you were a pilot and someone invented teleportation?

I realise these are slightly facetious examples, but we’re faced with problems and obstacles every day of our lives and how we respond to them says a lot about who we are as people and as business leaders.

Recognising a problem

All over the world, businesses are struggling to adapt to the challenges wrought by digital technology. Some industries have been hit particularly hard by the digital revolution. In 1999, for example, traditional record companies made US$14.6 billion, but only ten years later, that figure stood at just $6.3 billion. Music industry insiders call it the lost decade.

That isn’t to say that the music industry as a whole has suffered. Bands focus more on touring now and tech companies like Apple are reaping the rewards investing in innovative ways of music delivery. What the story does show, however, is the importance of meeting challenges. The successful companies innovated; the unsuccessful ones dithered.

So many industries have been hit hard by the digital revolution. How each has responded to it says a lot about how they operate.

There are exceptions to this story as well. Sometimes is pays to be conservative. When putting content online for free started eating into The Times newspaper’s subscriber base, they put up a paywall and increased both subscribers and revenue. Some papers that didn’t, like The Guardian, which has embraced free online content, are struggling and losing money. 

Overcoming a problem

Technological innovation has always been both a challenge and an opportunity. I think the stories above reveal an important way for businesses to embrace problems.

Look at the music industry example. The companies that survived in that environment were the ones that innovated, that changed their practices and realised that the old regime was over. By innovating, they not only staved off failure, but they also created new, successful products.

The second important thing to learn is to play to your strengths. When you come across a problem, pause and think what unique capabilities you and your team have to solve it. This is what successful newspapers have done. They’ve created models that protect and monetise the unique parts of their business: their content, while harnessing the Internet’s ability to share it.

Every day you will come across small and large obstacles in life and in business. At The Cobra Group of Companies and at Appco Group, I have certainly come across my fair share of problems. However, thinking innovatively and marshaling all of your unique capabilities and strengths to overcome those problems will help you succeed.

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‘The culture of a company is like music in a nightclub — the music you play affects the people who come in’

I started Cobra Group in 1988 and since that time I’ve worked with a huge variety of people from all over the world. Whether they were business owners, contractors or employees, the one thing that sticks out to me about everyone I’ve worked with is the importance of attracting people who believe in what you do and fit with the culture of the company.

This was the subject of a speech I gave to independent business owners in the Appco UK network recently, and I’d like to flesh out my ideas a bit more on this blog.

What is the culture of your company?

As businesspeople, we have to ask ourselves what our company culture is. I’ve written a lot about motorsport and about tech companies on this blog because I’m continually fascinated by how those companies define what their culture is. Look at a place like Google. Everyone knows that Google is a company focused on innovation; we know their company culture is innovative even if we don’t work for them.

This is true in motorsport as well. At the same skills-sharing event I spoke at, Mark Gallagher, a Formula 1 expert, told attendees about how Red Bull Racing created a company culture of teamwork and innovation from the bottom up so that everyone – from the company’s truck drivers, to independent contractors, to sponsors and media – knew what Red Bull racing stood for.

What music do you play?

My message to entrepreneurs is that running a business is like playing music in a nightclub. Some clubs will play techno music and techno fans go to those clubs and have a great time; other clubs play 70s pop and 70s pop fans go to those clubs and have a great time. That’s because when the music from a club filters out onto the street, it attracts the sort of people who enjoy that style.

In business, we have to think the same way. If your company’s culture is conservative and careful, you’re not going to attract innovators. If your culture is fast-paced and innovative, you’re not going to attract conservative and careful people.

You are the advertisement for your business

Thinking about the people you work with in this way is interesting. The conventional wisdom is that when businesses look for contractors or staff, applicants compete for the work because it’s perceived as an opportunity for them.

The way successful businesses think is by inverting this logic and looking at that person as an opportunity for them. Like the music in a nightclub, their culture is the product and they’ve got to work hard to attract the right people to it.

How do we make ourselves attractive to the kinds of people we want to work with us? Whatever your business model, whether you want innovative contractors, employees, or business partners, how do you create a culture so that those sorts of people choose your business?

My suggestion is to identify your company’s ‘music’ and make sure that you play it constantly and consistently.

 

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