Making Profit: Key attributes to a responsive business

One of the many obligations for all enterprises – big, small, not for profit or private is making a profit. And everyone involved in these enterprises know that a policy of maintaining the status quo will not produce quality and sustainable profits, and may eventually result in the firm’s rapid demise. A responsive business is one that grows in direct response to the needs of the market.

Often, “speed to market” is a crucial part of successful business strategies but speed itself is not sufficient – it is responsiveness, or the ability to respond rather than react, that is the goal. So how does an enterprise be responsive and make profit in a rapidly changing VUCA (Volatile, Uncertain, Complex and Ambiguous) environment?

There are many things which support a strategy of responsiveness. Here are 4 key elements of culture and purpose.

  1. Seek constant renewal.

A responsive business seeks constant renewal by creating the ability for its people to flex to meet needs as they arise. A business must seek to change and shape its environment especially with the Social Media revolution where products can become unfashionable mere days or weeks from successful launch.

Everyone in a responsive firm must understand that each individual should make a contribution to the overall success of the firm and accept their responsibility in the success. Small businesses are generally best at this, as their systems are less fixed, and decision making is concentrated. Large firms should adapt to a small business psyche if the safety of hierarchy and protection of systems is not too difficult to shift. As Francis Bacon said, “He who will not apply new remedies must expect new evils; for time is the greatest innovator.”

Where a business is aging rather than renewing, its problems are systemic. No amount of creativity and eagerness can make a difference if the reality is systemic stagnation. Trying to force more business through an incapable system is a recipe for disaster.

  1. Have vision that motivates.

Create a picture of the future to focus the efforts of the team. For Fred Hollows, an Australian specialist in eye disease, his vision was to stop Australian Aborigines losing their sight to trachoma – a preventable disease. His ability to visualise and communicate that picture has gained world-wide money and support.

Most businesses do not have a vision with lofty humanitarian goals but do have vision of how the business fits into the future. Responsive businesses are clear on what the business is, and will be, and communicates this well to their people, customers and others. For further insights into understanding the purpose of your business – watch Simon Sinek’s TED Talk on “Why?

  1. Start a community.

Seth Godin, in his book “Tribes” promotes the idea of building your business around  a collective of like-minded individuals (The Tribe) to optimise business returns. The central theme for your Tribe is your business purpose and your core values. He defines a tribe as: “a group of people connected to one another, connected to a leader, and connected to an idea”.

  1. Develop a culture of dissent.

Developing a culture of dissent encourages people to try something new and to succeed or fail in doing so. Looking at something anew can change a system, product, process or relationship. Leaving it as it is does nothing.  So often, our risk adverse society identifies failure as something which must be avoided. A responsive business says that failure is part of each person’s responsibility.

Where does innovation arise if not from people finding something lacking in the current product, procedure or service? Where people see the failure and look for ways to tap into the idea to produce success for the future, all failures will be seen as a stepping stone to success, not the end of a journey.

Thomas Edison, when asked by a young journalist if it felt like failure when he had to go through 10,000 bulbs to get one that worked, responded: “I didn’t fail.  I just found 10,000 ways that did not work.”

New ideas come from changing the status quo, not keeping it as it is.

In conclusion, no longer is a competitive advantage just differentiation or cost. It must now include speed of response because in a changing market no business can afford to stand still. Strategies supporting agility, flexibility and responsiveness are essential regardless of the external forces on the firm.

Flexibility and responsiveness are driven from the top, and assumed by all in the firm. How leaders will guide and implement these strategies is key.

Is your business responsive enough that it can cope with the changing market and still make profit?

Search this website