What makes a good business? What does ‘Good‘ look like? I reckon it is 3 elements – and ONLY 3:
- A strong proposition – a product or service that delivers real benefit to your market.
- A joined-up operation – a defined business growth strategy with clear goals and a motivated team engaged and focussed on achieving those goals
- Effective market engagement – A dynamic process to communicate your proposition to your market and through this, to build valuable customer relationships.
Think about the companies you know and respect. I bet you can give them a tick on each of the above. Let’s look at each…
1. A Strong Proposition
This is about what your business does, isn’t it? True, but what makes a proposition a STRONG proposition? Most SME businesses have competitors who offer the same or alternative products/services. Simply telling your market you offer product X or service Y just puts you in the mix with everyone else. To have a strong proposition you must identify what it is about your business that makes you different. Build your proposition around one (or more) unique differentiators and clearly demonstrate the value/benefit you deliver.
2. A Joined-Up Operation
Even in a very small business, it is remarkable how often there is a lack of internal communication. People just come in and get on with their job as they see it. There is only one path where every member of a team has a clear understanding of the business strategy and is heading in the same direction towards the same goals, yet there are many paths where people are going in different directions. When a business is busy there is work to do and customers to deal with. Taking time out to check everyone is comfortable with an agreed growth strategy and on a coherent path might be seen as a luxury too far – yet looked at as a key element of a good business, how valuable might taking such time out be? An engaged and motivated team on a strategic path they understand towards clear goals can be challenging to achieve. However, this is the heart of a true business and it takes focus and management effort. Without a joined-up operation, is a business any more than a bunch of people doing stuff?
3. Effective Market Engagement
OK, so you have a strong proposition and a focused and motivated team. Now you just need to make the most of what you have created and let your potential customers know about it and how you can really benefit them. The best business idea in the world will fail if people don’t know about it! The famous business management guru Peter Drucker said:
The business enterprise has two–and only two–basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs.
Yes, I know this article is talking about 3 things that make up a good business while the esteemed Mr Drucker is talking about 2, but they are different perspectives. Fundamentally, Peter Drucker is correct but to drive marketing you need both a strong proposition and a joined-up operation. In reality, these 2 are likely to be a mixture of innovation and cost – but no-one ever said you can run a business for free! The key to effective market engagement is to do something! If what you are saying doesn’t do justice to your proposition, you can change the message. Similarly, if you are talking to the wrong people you can retarget. In both cases, you have something to work with. In essence. if you aren’t engaging with anybody about anything, you will fail – no matter how strong your proposition or joined-up your operation.
2 out of 3 Just Doesn’t Cut It
Why is it that my 3 elements are so rarely considered together? For many businesses, what they do is what they do. Consequently, these business owners spend little time working to make their offering as relevant and advantageous to their customers as possible – their proposition just is! Even if a business is focussed on service improvement or regular new product introduction, it is developing a joined-up operation and effective market engagement that are so much like oil and water – they just don’t mix. Therein lies a problem. Focus on outward market engagement without the context of clear business strategy and goals together with a joined-up operation makes it more difficult to establish if marketing activity is actually getting you anywhere. When the latest marketing idea comes along, it isn’t difficult to see the grass on the other side of the fence as greener – until it isn’t! Equally, being inwardly focussed on planning and structure without looking outward to your market can become frustrating as all the effort fails to produce commercial results, ultimately risking breakdown of the agreed strategy.