Edition 143 – Overpromising
Have you ever been around businesses or individuals that keep promising, but aren’t delivering? It can be frustrating and forever disappointing if you’re the one being told. If you’re the one doing the telling, it can be a recipe for disaster. Let me explain.
A family business, that had been doing the same thing for a long time, decided to branch out into a new field. It involved some elements of the skills and technology they employed in their existing business. However, it also involved new research, new thought and a new focus to bring the new idea to market. The Managing Director took charge of the project and seconded some resources to commence the journey.
Right at this point, let me state a very stark difference between family businesses and your typical, run of the mill, large corporate. Family businesses are governed, first and foremost, by emotion. This means, when the owners of family businesses have a big idea (which I sometimes call a brain-snap), there is often little structure to the decision-making process other than the following:
- It’s a great idea (because I thought of it!);
- It’s got legs (even though we haven’t yet undertaken a proper feasibility study);
- We need to devote cash to developing it (as I’ve got access to the cheque book);
- Has anyone got any objections? (which if you do, I’m not listening to them anyway).
The problem with brain-snaps is that bored business owners get carried away in the romanticism of the new product or service they’re developing. Generally, they take their eye off the ball of the everyday business, which doesn’t suffer at first, but can deteriorate very quickly.
More often than not, family business owners that have had brain-snaps have told all and sundry of their great business idea and how quickly they can get it to market…..all whilst it is still a thought bubble.
The more a new business decision is a brain-snap and less a considered process undertaken to assess:
- The product or service in detail.
- The likely future market potential – in units and dollars.
- Whether or not there is actually a need (or future potential need) for the product or service.
- The cost of development.
- The in-house resources that need to be devoted to the project.
- The external skill set that needs to be brought in.
- The time it will take to develop the product or service.
- When it will realistically be released to market.
- How and when you should make the market aware of your new product or service.
the more it will be an exercise in overpromising and underdelivering.
In my opinion, if you take more than a year from the time you’ve announced your idea to the world, but all the time continued to promise that the new development is coming, all you are doing is:
- Wasting your own time.
- Frustrating your current market.
- Draining valuable working capital.
- Creating reputational damage to the business.
Next time you have a great idea in business (or a brain-snap), think very carefully when you’re going to start telling the world about it. Remember, that starts the clock of expectation ticking.
This Week’s Tip
If you’re a family business owner that has a great business idea, check your ego at the door, temper the emotion, and speak to your key advisors to ensure logic takes hold – and you’re not betting the house on a pipe dream.