Every business faces change. But those changes, big or small, can either propel a business to new heights or send it crashing to the bottom. So what separates those who thrive on change from those who are crushed by it? Is it luck? Maybe, but has any business been consistently lucky throughout its centuries-long existence?
It all goes in a vicious circle: the business fails to reach the right customer group, and sales fall. Marginal revenue shrinks dramatically, and the banks are the first to notice. Loans are cut off quickly, and profit margins are reduced. The business is severely undercapitalized, and the products it makes do not meet customer needs. And so potential customers continue to leave.
Obviously, the people and businesses that have become successful and prosperous through change have certain secrets or operating principles. Who knows, maybe those secrets will also be the lighthouse that guides you through the storm of change?
5 basic principles of all businesses
• Use resources sparingly:
In any case, saving must be considered the top principle. Saving means using financial resources in the most economical way, not spending more than necessary. But that does not mean you will be rich, or have to be rich. Rich people also spend lavishly like everyone else, even more lavishly. However, they have more opportunities to borrow money, because they have collateral, or at least they have a reputation. That means, the best way for us is to try to spend reasonably, save and stay away from debt. As for each individual, saving is to protect one's health both physically and mentally, to build and maintain important relationships to rely on in difficult times.
• Building good relationships:
People often only care about the relationships that are immediately present and necessary, such as with their direct boss or colleagues in the same office, and push colleagues from other departments or even non-direct leaders to secondary positions. This will break the internal connection in the company, and as soon as a small problem appears, that loose collective will collapse immediately. In the past, it seemed that talented directors had the ability to hold all their employees in their hands, they understood and knew everyone, superiors or subordinates, union presidents, even colleagues in other businesses or the company's janitors. The miracle is that all those relationships came in handy right when they needed them most.
• Access to necessary information sources:
Businesses often limit the exchange of information, even internally, because they believe that information is a strategic weapon in today's business. However, those businesses will be at risk of being "hit by their own petard" because individual departments may have enough information and operate quite smoothly, but when the business falls into difficulty, they cannot support each other because they do not know anything about any other field.
Of course, businesses need to keep confidential information about their personnel and strategies, about their key products or those about to be launched on the market. But in reality, businesses often “keep” information too confidential. Sometimes revealing confidential information about yourself or your business is suicidal, but only if your business is based on deceiving employees, partners and customers. But it is these business schemes that herald the end of a business, because they destroy the foundation for the existence and development of a business: internal relationships within the business.
• Decentralization:
The core of the issue of decentralization is “You need to trust your employees”. Business leaders need to delegate decision-making power to as low levels as possible to promote their autonomy.
The reason is easy to understand: in a centralized pyramid-shaped organization, only one brain has to function: the top leader. Employees at all other levels have only one task: to obey orders without having to use any thinking at all.
To fully exploit the intellectual resources in the enterprise, leaders need to delegate the autonomy to solve problems to their levels. They must learn to solve problems themselves and experience both success and failure. This is a structural model that has been applied for a long time in most prestigious corporations in the world.
• Create common interests:
A business cannot survive and develop for long if its employees do not care about the quality of the products they produce, or are indifferent to the business's loss-making situation. They may just need to learn a little about what customers like and dislike about their products, or feel proud of each outstanding aspect of the product. That requires each employee to have a love for their job and be committed to the business. That is the core factor that makes the difference for the business, is the foundation that supports the business in difficult and unfavorable circumstances.
Find out what your customers and competitors are saying about your company. What can you do to improve your company's financial situation? What can you do to better connect your people and improve the flow of information within your organization? What can you do to increase the autonomy of all levels and make the future of your company a genuine concern for all?
Vision