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Saturday, June 18, 2011

Up or Down, Nothing Stands Still

Every business has a life cycle.  I have seen the cycle broken down into four to seven stages.  For my purposes today we are going to simplify this to four stages.  The stages are;

     Introduction or Start-up
     Growth or Development

All businesses follow this cycle.  When you hear a business owner say they are happy with their current sales and just want to maintain, they are already in decline. Maintaining the statuesque is not possible.  When a business remains static their environment continues to move forward, leaving them behind, in decline. 

Competition is always seeking to take your customers.  Competitors in the Growth stage are striving to improve.  They seek new ways to produce a better quality, less expensive product delivered to the customer at a faster rate.  If your business is simply trying to maintain they will take your customers and you will decline.

Technology, machinery and materials are constantly improving.  Companies that are in the Growth stage will take advantage of this.  If your company is not, they will beat you in the market place and your company will decline.

In the Maturity stage companies begin to accept their processes and techniques as successful.  They are at their peek and want to begin capitalizing on their investments over the years.  They become emotionally tied to their processes they invented and don't want to change.  They begin to see record profits and are blinded to the fact that competitors have made them  the target.  At their peak, it is the beginning of the end.

In the past, this cycle took many years. Changes were slow and the cycles long.  In today's world, with rapidly changing technology, world wide economies and lightning fast communications shortened the cycle. Companies rise quickly to the top of their industry and then fade away in only a few short years.

If the cycle is short and inevitable for all companies, how do some companies prevail for years?

Awareness of the cycle and courage to change when things are good, is the key to long term success 

To survive the business cycle and not enter into decline, companies must reinvent themselves at the peak of their success.  Most companies move into the decline stage, find external excuses for their slide and wait to react until it is too late.  Others accept the true reasons for the decline but have waited too long to initiate changes and struggle to the end.  The key to longevity is to understand the business cycle and begin the transformation when they are at the top. 

 It is against human nature to make drastic changes when things are good.  "Why Change a Good Thing?".  Change is difficult and there is always the fear that you will make the wrong change.  When things are in decline it's easy, Can't get any worse.  When things are good people do not want to mess them up.

To make successful changes, the company must retain it's core principals.  The core principals that established the company allowed it to achieve initial success and will guide them in there transformation.  They form the culture and reason the company exists.  Loosing track of these essentials during the process will insure failure of the change process.  The employees, your most valuable asset work for the company because of the culture and core values of the business.  Abandoning the core values will not find support with the team.  Without the team, change is impossible.  It is okay to develop and refine the culture, but never abandon it.

Ebsco is currently in the maturity cycle. We have found success and respect in the industry.  Now is the time for change.

We are looking at every process and finding ways to improve.  We are investing in equipment and materials to increase quality, reduce costs and lead times.  We are enhancing and expanding our training program to equip our team with the best tools available. We are investing in software to help us manage the process and provide better communications. Ebsco is transitioning from the maturity stage back into the start up cycle.  We are rigorously maintaining our core values and culture to insure our success.

So, as the competition establishes Ebsco as the target, we not only are moving the target, we're changing the target completely.  We are taking what the competition does well and setting it in our sites while maintaining our strengths. 

We are not starting over on the cycle.  We drug the entire cycle up to where we are, and are starting UP from there.  The process takes time but it's one hell of a ride.  I hope you'll join us on our ride.

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