The Art and Science of Business Design Part-4

Posted by Robert Norton on

The lack of a good business design process is the number one reason why most businesses fail today.  Almost everything else, like poor market, running out of capital, unexpected risks and poor sales, is just a symptom of this root problem.

  • How Many People Does It Take?
     

Consider for a moment all the things we as individuals do not know!  It is pretty sure that today no one can even keep one-tenth of one percent of the knowledge available to mankind in their head!  Scholars say the last Renaissance Man existed in the early sixteen hundreds sometime.  This was the last century in which anyone alone could claim to be an authority on everything.  Today, four hundred years of collecting knowledge later, we now double human knowledge every few years!  How can anyone be silly enough to think they can know enough across a whole industry plus management, sales, finance, marketing, technology, and operations to actually design a business alone?  Let me tell you I have never met anyone who can, and I do not think they ever have existed, or ever will. 

 

How many elements of the business will be challenging?  Today, sales and marketing are almost always challenging because people are overwhelmed with options.  Are you pushing the limits of logistics, technology, or the need for capital?  If these disciplines demanded a top person to do when you get there, you will certainly need a top person to contribute during the business design phase.  Typically, you will need at least three or more likely five, experienced management-level people along the way.  This is not to say you need them full-time, just contributing as you gather your market research and iterate your business design.  You may need many more in a consulting capacity for some quick answers, but often this can be over lunch and by picking people's brains in exchange for past or future favors.  However, this is only if you want to be successful - if you plan to fail, one will certainly do just fine.

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  • successful - if you plan to fail, one will certainly do just fine.

    • Knowing What You Don't Know
       

    Consider for a moment what each of us has NOT learned from a mathematical perspective, or as a percentage of all human, or even just business, knowledge?  I would never dream of designing a business alone without the expert help of several people who are more experienced than I in other areas.  But who?  Where do you start?  As you have seen, who you start with will be a huge factor in where you end up.  Yes, it is key to understand this is an iterative process.  You have to start somewhere, and without being too committed in time and capital invested.  So it is an unavoidable logical conclusion that business design MUST be an iterative process by its nature, and this fact that one person cannot do it alone.  You need to iterate through several versions of business design over and over again, getting halfway closer to your goal each time, but probably never finishing.   In fact, this process must be repeated FOREVER, because the market, technology, landscape of competition, and other factors, which are totally out of your control, are constantly changing like the weather.  So every business must be repeating this process regularly.  Today, this is one of the chief objectives of the CEO that was not needed 50 years ago. Keeping your business design up-to-date, based on rapidly changing market conditions and circumstances, is a never-ending process.

    If you think about it you will realize if we only use the things we have learned before, which we just agreed, I hope, is a small fraction of 1% of available information, we are almost certain to NOT have the proper business design.  This does not even take into account, the fact that this is a different place and time.  The obvious truth is, when you objectively consider it, it is very unlikely that the exact model of sales, marketing, operations, and other disciplines at the founder's last company, or even all their previous companies, are anywhere near the optimum ones for this new business.  If you accept that, then you must realize that every business is totally unique and needs to have its own custom business design with the input of many experts in appropriate fields.

    Since no one can reasonably even claim to consider business options that they have no previous experience with very well, it is not only difficult to design a business without a good team, it is literally impossible, except in the very narrowest of circumstances.  And I would argue in such circumstances this would not even be true entrepreneurship because it must be an exact clone of some other simple business.  So, it follows that any founder who says they have designed their business before they have a full team involved and lots of market research completed cannot possibly be on the right track.

     

    Every business could be said to have been designed, but the question is how many options were considered and how many people, with how many sets of professional expertise, were involved?  Given any technology, product, challenge, problem, or core value that you have to deliver to a market, there are literally thousands of ways to construct a business to extract value from this core value, expertise, product, or service (the center core of the vision pie) and I'll show you why shortly.

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Bob Norton is a long-time Serial Entrepreneur and CEO with four exits that returned over $1 billion to investors. He has trained, coached and advised over 1,000 CEOs since 2002. And is Founder of The CEO Boot Camp™ and Entrepreneurship University™. Mr. Norton works with companies to triple their chances of success in launching new companies and products. And helps established companies scale faster using the six AirTight Management™ systems. And helps companies successfully raise capital.

Call (619) SCALE06 or email info@AirTightMgt.com for a complementary strategic consultation.


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