Getting ready to think like an entrepreneur

Broaden your horizons and look to the future for greater success, Leslie L Kossoff advises.

Leslie L Kossoff on how to expand your business horizons - image: iStockphoto
Leslie L Kossoff on how to expand your business horizons - image: iStockphoto

In HR parlance, there is a lot of talk about "upskilling" and "training up" employees. And that's a good thing. You want your employees to be as "up" as possible.

But what about you? What about those of you who own, manage, strategise, operate, decide, determine or consider for the business? How are you upping yourselves? Right now - and I mean right now - there is a greater need for you to focus on how you think than there ever was before.

Economic expectations are that the first half of 2011 will be good. The second half - well, that's a different story. By that time, we will see much more clearly what the impact will be of the Government's decisions on austerity as well as the VAT increase, how the rest of the world is coping with its own slow growth and recovery (except, of course, in the emerging markets - for those of you who can export), what the real unemployment numbers are and much, much more.

It all sounds so dire, doesn't it? For some it will be. It doesn't have to be, though. That is up to you and the extent to which you "mind up" - for which, read "broaden your horizons, stop thinking and seeing as you have in the past and look for and determine what's next". It is time to think like an entrepreneur.

Seeing yourself as an entrepreneur

In my last article (HW, 4 February), I wrote about the customer experience and what your organisation needs to do to create a return-customer guaranteed environment, whether you are b2b or b2c. I ended by stating that it takes courage.

Your mindset is where that courage comes from. No matter how old your organisation is or how long you've been with it, you have to treat it - and yourself - like an entrepreneur. Like a start-up, facing an unknown world filled with possibilities and pitfalls. As though everything is in front of you and you are willing to let go of everything from before. Because that is today's world - and tomorrow's, too.

The other equally important component of entrepreneurial thinking is to know and expect that there will be failures. Then, most importantly, to accept and use those failures for what they are - the next step to success.

Because only by giving yourself that dual freedom - expecting and learning from failure - can you provide yourself, your people and your organisation with the room needed to always be aware of what is on the horizon and what needs to be done. Better yet, you will not only determine it, you will dominate it.

Does failure have to be failure?

From an American entrepreneurial perspective, the British orientation to failure remains something of a mystery. It is also a disadvantage.

Being an entrepreneur means accepting that failure is part of the game. That if you do not try something new, then you are not going to get where you want to go.

That what was is great - and should be incorporated and adapted to create continuity and familiarity - but the context of the world is what's next, and that means the context in which your business exists is always what's next.

That makes it easy to become comfortable with failure. It takes the negative emotion out of it - replaced instead with the understanding that all failure really represents is a lesson towards success.

The more that you try, the faster and smarter you will run your business and create the successes that you want. This means that along the way you want failures as well as successes so that you are consistently analysing, observing and learning what works and what does not. Most importantly, you learn why.

Additionally, the more you create an environment where employees know that they can bring new ideas to the fore, try new ways of doing what they're doing now and collaborate with each other - all without the fear of losing their jobs by failing at their innovation attempt - the faster and smarter your employees will drive your business towards the success you are now all seeking.

And that is why the so-called "low hanging fruit" of lean and other improvement initiatives are okay as far as they go - but they don't go far. They are a great starting point, particularly for establishing a participative, improvement-oriented culture, but will not get you where you want to go.

When you think like an entrepreneur, you create an entrepreneurial culture - a culture of possibilities, of rejoicing in success as well as the lessons learned from failure. And so, as always, let's take on the questions with commentary and guidance:

- When was the last time an idea of yours failed? (If it was recently, good for you. If it wasn't, you're not trying hard enough.)

- How did it feel and what did you do? (If you berated yourself, stop it.)

- Were your people aware of the failure? (If so and you took it well, bravo. If not, you have got a culture issue to address.)

- What did you learn from the experience? (The best part of failing is the lessons learned analysis to ensure that you got the biggest bang for your buck from the experience.)

- How did you build on the failure - and how soon after it occurred? (To create a fast-moving, innovative organisation you want to turn failures into successes through the lessons learned quite quickly. If you didn't and the lessons are still there, start now.)

Now apply the same set of questions and commentary to your employees' efforts to innovate and try new ways of doing business. Did they fare any better than you? If so, that is a testimonial to your management. If not, that is because they either think they should not or cannot innovate and will be punished if they try and fail. That too is a testimonial to your management, but not the one you want for either yourself or your enterprise.

Failure as success is a tool that you can easily adopt and use. Do it. That way you will change your whole organisation and everyone in it into entrepreneurs. That is what you want and need.

Failure and opportunity

In December, when I read the article about Alan and Colin Frampton's decision to sell Donaldsons (HW, 10 December 2010), I had very mixed feelings. They were both personal and entrepreneurial, and they represent exactly what I have described above.

On the personal side, I felt bad for the brothers in having to make that decision. It is always worse when there is a closely-held history in the business. Have that history go back to 1887 and the decision becomes fraught with emotion that far exceeds simple business. From there, the entrepreneurial part kicked in and it made me start to wonder.

Donaldsons had a major customer - Sainsbury's - so there wasn't a problem with finding a market. The problem was in making an adequate profit on the 16 million stems a year that Donaldsons produced. What the UK cut flower industry now had was an opportunity. Or not. Which is where my thinking went next as I continued to read the article.

First, I wondered what the rest of the growers would do to capitalise on the potential that had arisen. Donaldsons leaves a hole. It also leaves a customer with a client base that still wants the product but needs a solution to provide that product.

There are hole-filling growers who want the business, which may be in or out of the country. From a pure-play business perspective - which will be the way Sainsbury's and the other customers see it - that won't matter. All they will be concerned about is how to ensure that they have the product they need to provide their customers with what they want when they want it, at an attractive enough price point to give them the margins for which they are looking.

But what are they looking for? It may be that this is a time to let current product lines go because the profits are not there and will not come back. It is now time to focus on higher-margin products that generate profits.

That is what the purchasers of the Donaldsons site are doing. They are not continuing in the cut flower market but are going for what they have determined to be next - soft fruit. Better yet, because Sainsbury's and others are focusing on home-grown product, the new site owners are offering a UK-grown, feel-good factor to their in-country product offering.

They will, as a result, be able to command a better price for their product. They have got the product, the volume and the differentiator. If they have got their supply chain in order, they have really got it nailed.

And that is the thing about being an entrepreneur. Sometimes the win is not based on what you are doing now, but what can be done with your core expertise. Granted, growing cut flowers is not the same as growing strawberries, but it can be argued that growing is growing

That is the entrepreneur's most powerful argument. That what we are best at is producing horticultural product. The customer and the margins determine what your products and services should be. Not what you have done before - no matter how successful you may have been.

Controlled evolution and your business model

Industries evolve, just as the businesses that make up those industries must. As a result, the better prepared you are for what is on the horizon - visible or not - the more you can determine exactly what that horizon will be as you make it accessible.

If yours is a highly innovative organisation, then you are going to change the world. If it is not designed to change the world, then your innovations must come from being aware of the evolution around you and then revolutionising how you do business on an as-needed (for which, read "continuous") basis.

Let's take a look at Donaldsons again for just a moment - and now let's make it a hypothetical. What if the organisation had decided to stop operating in the cut flowers space and instead shift its product to soft fruit?

Part of its value proposition to its primary customer and other, potentially altogether new, customers might well be that it has a track record of success. That it has established its credentials as a preferred provider that can be trusted.

Sure, the company is offering something else, but that something else, based on the market research, is what's needed and what's next. It is providing a solution and if it really had it nailed, it could do the deal well in advance of the changeover. The added win for its customers might have been to have already identified competitors who would be able to fill the hole it was leaving.

After all, who cares about those guys? You are not competing with them any more. Entrepreneurial thinking is all about what's next and ensuring that you are the one controlling it.

And that takes us to your business model. Because if you are not on top of that game - constantly - you are going to find yourself in a disadvantaged position that you could have avoided. So, here are the questions with which you start:

- How has your business model changed over the past five years?

- Is it representative of where the market is going?

- How do you know? What data and resources are you accessing to ensure that you are pointing in the right direction?

- Within that business model, how have you changed your operations to reflect new and emerging customer expectations?

- What about your product and product mix?

All of which takes you right back to your customer and creating success.

Building a business that works

Over the next year, your country and industry are going to see more changes, happening faster than ever before. It is up to you how you want to deal with that. The information and opportunities are there for you to see and on which to act. But you have to start now. So mind up, shift your thinking and win. L

- Leslie L Kossoff is the author of Leadership Quantified - see www.leadershipquantified.com


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