About 50% to 70% of business improvement efforts fail according to many studies, yet I’ve discovered on an approach that is delivering a 70% success rate on my improvement work. In this video, I’ll share another piece of the puzzle that has helped make this success possible.
Hi there, Matts Rehnstrom here, Shaper of Business Excellence. In this video, I’m going to talk about the business idea. I’m still standing here by my poster showing all the business excellence components and the relationship between them. What does this do for us? It makes us understand all the important components that we need to work with when building improvements for our business.
In today’s video, I’m focusing on the business idea. The last video, I talked about the owner’s perspective and that it’s important for you to understand what the owners want out of it, not as a business idea, but what they expect in general.
I also told you in that video that you need to write this down in a one-pager. This one-pager will come in handy because when we look into the business idea. However, before we look at that in more detail, what happens if you don’t have a business idea?
Without a Business Idea, People Will Be Less Engaged With Your Business
If you don’t have a business idea, it’s hard for people within the organization to really be engaged in their work because they don’t really know why they’re there. In the first video or maybe the second video in this series, we talked about the big WHY, so the business idea is very related to this WHY.
Here we will describe the whole idea behind the business. If you don’t have this and if it’s not written in a way that is useful for the people, then it’s hard for them to be engaged in the day-to-day business.
They do what’s expected but not anything more because they don’t really know if they want to take an initiative. They don’t know in what direction to take that initiative.
Many Organizations Have A Business Idea Because Someone Outside the Organization Demanded It
Many organizations that I meet have a business idea, but more dutifully. They someone told them that they need to have it, but don’t use it.
It could be the bank that said, “Okay, what’s your business idea?”, when they’re going to lend this organization money. Or it could be a management consultant. Yes, I know they just say you need a business idea, but then they write it up in a fancy way that is not used within the organization and that’s not how you going to do this.
What do you need to do then? Well, here it comes:
- Find out WHAT you are going to do in the business: Are you selling hot dogs on the street or are you a shoe store or are you working within as a law firm or are you educating people?
- Find out what VALUE you create: What’s the outcome of what you’re doing? If it’s education, what’s the outcome of that education? If it’s a law firm, what’s the outcome of your law firm work
- Find out for WHOM you are doing it: We’re going to talk more about the market and your customers later on, but here we have a higher level of thinking about who we serve and it’s vital because if we can set this on a higher level, we set the tone for everything that comes below here that we’re willing to work with later on.
- Write the BUSINESS IDEA down in a way that is easy to understand: It could be people working within the business, it could be investors, it could be the existing owners that say, yes, that’s exactly why I put in money into this business.
Okay, so let’s give two examples. I don’t claim these to be the best business ideas, but I just want to make a point how different they can be and how important it is that you write this down because as you see in this example, it will be a totally different way how you will set up the organization.
The first example is then we provide modern style shoes to the urban woman so that she is looked up to and respected. Okay. I did say that wasn’t a perfect business idea, but that’s the first one.
The second one is we give the outdoor people comfortable and reliable boots for adventures and safe nature experiences. That’s another one they both have to do with shoes.
The first one gave shoes to women, the other one gives boots to people that is outdoor. If you see these two, you understand the power of having a business idea for your business because it actually points your business in a certain direction and the things that you describe in the business idea will be used later on in the work with the rest of the components.
That’s why it’s so important that you nail this business idea. So you explain to everyone that is a stakeholder in into the business or other business that this is what we’re doing within our business.
What Type of Business Idea Do You Have?
So what about the business idea that you have in your business? Is it a more general one that is not really juiced for anything? Because it doesn’t really say that much or is it on a more detailed level where you can read and understand what your business is doing.
Please leave a comment about it below and I’m excited to see what you write and how you find your business ideas. So with that said, let’s go shape our business for excellence. And see you in the next video.