In business, like in sports or education, there are many contestants, but few winners. True champions are those who excel consistently over a long time, like a student who passes tests from junior school through high school and all the way to university. Or a team that wins more titles and trophies than others, not in just one season, but over many years.
Of course champions do lose at times, but they achieve more wins than losses while making it all seem very easy. The way Manchester United beat Manchester City to win the Community Shield last week is a classic example.
A champion is distinguished by three attributes: being the right player, in the right type of contest and with exactly the right capabilities needed to meet the particular challenge. Business is more complicated than sport or education, it being an unpredictable game that is facing increasingly more challenges from competitors, more discerning customers and a volatile economic environment.
Very few companies emerge as winners consistently over many years. For new small businesses, winners are rare; only about five in every hundred survive beyond 10 years. And only a handful go on to create a lot of value, something that all entrepreneurs anticipate when starting their businesses.
Although not all entrepreneurs desire to be millionaires, no one starts a business with the intention of failing or dying poor. Three important qualities will give you the right to win in business, similar to what makes champions win.
One of the things I have observed among SMEs over a few years of business consulting is that the majority lack the basic capabilities required to run a business. Few people acquire skills in such key areas as business planning, marketing, financial management, people management and customer service before starting in business. But if you want to be competitive and successful, you do need to fill the skills gap. In the hyperinflation era, entrepreneurs abandoned the fundamental values in business and instead engaged in get rich quick activities. Because of the shortages and the massive demand prevailing at the time, anyone who could get hold of any scarce commodity could easily make money. No business skills were required.
However, in our new free market environment, one needs to have the right capabilities in order to be competitive and grow. A business without the basic capabilities disadvantages itself, and will quickly be overtaken by more competitive players.
Most business skills can be acquired through short-term courses at colleges and business training institutions, or through reading relevant books, attending face-to-face training workshops or finding a suitable mentor or coach. Take action to empower yourself with the necessary capabilities in order to earn the right to win.
In the old economy characterised by controls and shortages, businesses thrived from selling commodities. The problem with commodities is that in a free economy, anyone can enter your industry. If more players start supplying a certain commodity, they all compete on price. This is good for customers but bad for your bottom line. In the end, each one manages to get a few crumbs from a fixed slice of the cake.
Right products have three major characteristics: they are not easy to produce, they provide a solution to customers’ problems and are targeted at specific customer segments. The time for me-too type of businesses is over. If your product is not unique in some way and does not seem valuable to a defined customer group, then it’s a commodity. And commodities rarely give you the right to win.