I remember being a teenager growing up in Langwarrin. It was a simpler time than our lives now - back then I took sheer joy heading to my local Blockbuster to hire the latest 90s action flick. Wow - now I sound old!
Little did I know that the introduction of a new millennium would bring about a big change to the fortunes of my favourite video store and how I would watch movies and TV shows.
In fact, even the CEO of Blockbuster was unaware that from 2004 a $6 billion business would file for bankruptcy within six years as Netflix took hold.
It’s even reported that in 2000 Netflix CEO, Reed Hastings, approached Blockbuster to pitch his idea of a joint venture. Apparently, he got a meeting but was laughed out of Blockbuster HQ.
The demise of Blockbuster is debatable but is largely centred on their inability to adapt to the changing digital landscape but I’ll let others argue the true fault.
What seems evident to me though is that Blockbuster didn’t have measurable evaluation and control mechanisms in place that enabled the company to transition into other forms of operation before it was too late.
Previous (or current) successes mean nothing when customer circumstances and wants change. If you can’t evaluate your situation and control how you operate, you risk becoming the next Blockbuster. Or Kodak. Or Nokia...
In order to evaluate your situation, you need to start with the end in mind and know what you want to achieve. One might argue that Hastings knew what he wanted to achieve and started with the end in mind - a complete take over of Blockbuster.
Measures put in place must be able to identify and track what you’re doing (or not doing) and keep you accountable as an owner and a business. A complete and honest evaluation of where you’re at (and where you want to go) will keep the fire burning - you’ll remain focused towards achieving your mission.
Here’s a finance example. If your target is to make $100k per month in revenue and each customer is worth $20k - that means you need measures in place that predict the frequency of potential customers you need to be in front of each month, judged against your customer conversation rate.
At $20k you need five customers per month to hit your target of $100k and with a 10% conversation rate, you need to be pitching to <insert number of potential customers> to achieve your goal.
Success in business is not down to luck, it’s your ability to evaluate your situation and respond accordingly - and this often has a long-term and short-term approach.
Long-term measures will direct the future course of your business and where you want to end up - that might be selling your business, building out your team, overseas offices etc. These long-term measures are to be understood and worked towards, but not something that takes immediate focus - that’s what short-term measures do.
Short-term measures focus you on quarterly, weekly and daily targets and are needed to propel you towards your ultimate objective efficiently and effectively. Without breaking down long-term measures into easier strategies to achieve, you risk losing motivation or feeling too overwhelmed as long-term measures are all-encompassing and require commitment and time.
While evaluation of your business and its objectives is vital, it means nothing without the ability to control outcomes.
Controlling how you operate is paramount to success. It seems the word ‘control’ has negative connotations in modern business, but it’s vital. I’m not talking about a top-down approach to running your business where every single thing goes through you. In this context, control means your ability to respond to the situation you face.
If you lose a customer do you spit the dummy or evaluate why they left and put in place control measures to ensure you don’t have a repeat circumstance?
It’s what you go in these situations that determines how long your business journey lasts.
But control goes beyond just customer care, it also needs to be in place throughout your business development to enable you to effectively pivot when needed.
Using the example above, if your target is $100k per month and you miss the mark consistently, something is not working. Putting controls in place becomes your identifier for when you start going off-track and not achieving targets.
Over the last six months, I’ve been speaking with a client of mine who has told me his fitness and healthy eating has taken a battering since he started his business. It makes sense (and happened to me), with the hard slog and hours that go into creating a business it’s no wonder health and fitness are not made a priority.
Yet for my client, he felt it was starting to impact his mindset and wanted to correct it. We devised a plan to get him to lose weight and recommit to his health - we called it our Charter of Commitment.
First, we evaluated his situation like working hours, meals and exercise and put measures in place to monitor what we did. For him, a weekly goal was:
To control his situation, we conducted weekly video calls to monitor progress and address why/when he fell short (on some occasions).
It’s pleasing to say this form of evaluation and control has worked wonders for him, he’s lost six kilos and has refound his motivation and that’s leading to new client interest in what he does.
This idea was so beneficial that I joined in with his Charter of Commitment and noted down what I needed to improve. I’ve since upped my exercise and lost weight too.
To ensure you’re building-in correct evaluation and control measures, here are the three steps you need to implement:
Successful evaluation of any strategy begins with defining the parameters that need to be measured. Parameters that are measurable or quantifiable will help you evaluate your progress accurately.
Successfully executing or implementing a strategy will produce results. But do the results you got match what was needed according to your plan? If not, you need to re-evaluate and make changes or take corrective actions.
Monitoring internal and external issues will enable you to react to any substantial change in your business environment. Internal and external issues are constantly evolving, so any data gained in this stage should be retained to help with future strategies.
Gauge your progress against your objectives by evaluating whether you have effectively followed the steps you outlined and whether these actions have produced the desired results. Upon review, if you determine the strategy is not moving the company towards your goal, take corrective actions.
Blockbuster will go down in history as one of those business stories you don’t want to be. But the reality is, you don’t have to be like them if you’re prepared to evaluate your situation and control your operation.
This will help you to re-evaluate whether the strategy you implemented and the results you obtained from their execution met your long-term and short-term goals — and if it will move your business closer to achieving your Ultimate Objective.
It makes sense that if you can’t evaluate and control your progress you can’t tell if you are moving forwards or backwards. In hindsight, I bet Blocked wished they’d paid more attention to evaluation and control.
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