Art and Janet, husband-and-wife owners of a rapidly growing tool rental company had big growth plans for their company, but they faced a challenging dilemma. They were beginning to explore franchising their business and soon realized they needed to create an operation that was so attractive other people would be interested in becoming a part of it by becoming a franchise owner.
At one of my seminars, they were introduced to the game-changing concept of “How you produce your product was more important than your company’s actual product”.
This insight proved to be the catalyst that enabled them to start to pursue their dream. They soon realized that developing robust systems was a necessity, because how they actually provided their service was just as important as the tool rental service itself. Using other concepts they learned during the seminar, they put the proper Systems in place, and added the Metrics, Quality Loops, and Incentives that would be required for the proper ongoing execution of their operations.
These actions provided them with a sustainable competitive advantage in the marketplace, which in turn enabled them to pursue franchising their company. Not only that, but having effective Systems in place enabled them to spend more time away from the business at their vacation home.
Your Business Is Your Product
But Art and Janet desired more, they wanted their business to be all it could be. To do this they needed take the above concept, “How you produce your product is more important than your product” to the next level which was, “Your business is your product”.
This effort began by them asking the question, “What is our product?” For a business owner it may be lawn mowers, engineering services, or commercial construction, etc. However, for that business owner, in reality their product is a system that produces lawn mowers, engineering services, or commercial construction, etc. In Art and Janet’s situation, this was tool rental services.
The concept of Your business is your product means you should view your company as product sitting on a shelf that is available for someone to purchase. When you go to a store to purchase something you shop by comparing the features of each product, its claims, its price, its packaging, etc. to determine which product is most attractive to you.
You should evaluate your company in the same way. Your overall goal should be to create an organization that is very attractive to a potential purchaser and is more attractive than other businesses that are also “sitting on the shelf” for an investor to buy. You should be trying to create a business for a potential “customer” to buy, whether you are planning to sell your company or not (sooner or later most likely you may want to sell it).
Your Business is “Sitting On The Shelf” for Someone to Buy
If you apply this concept of trying to make your company more attractive than other businesses that are also “sitting on the shelf”, you will end up being driven to make it the best it can be. By doing this you will avoid falling into the status quo and becoming complacent with your company the way it is now. This will lead you on a quest to be continually looking for ways to improve your business and make it the best it can be.
This breakthrough concept of seeing their company “sitting on the shelf”, was the secret ingredient that enabled Art and Janet to get their operation ready for franchising it. Whether you are interested in franchising your company or just want it to achieve its full potential, and make it the best it can be, this concept can be a game changer for you.
The concept of relentlessly trying to improve your company so it is more attractive than other businesses that are also “sitting on the shelf” for an investor to buy, will catapult your enterprise forward. You may be wondering, what are some of the ingredients of an attractive business?
First are significant current profits. Second is a high potential for increasing future profits. Third is the existence of properly functioning systems. Fourth is a fully engaged, stable, and contented work force, which is something that is often overlooked by many business owners. There are other ingredients, but that is another subject. By employing this concept of trying to make your company more attractive than other businesses, you will accomplish the four items above.
Proper Systems Produce a Sustainable Competitive Advantage
The above concepts of, “How you produce your product is more important than your product” and “Your business is your product” are based on the utilization of Quality Loops (which have been discussed in recent articles).
Quality Loops play a key role in re-systematizing your business in that they use your Metrics to correct the execution of your Systems/Processes when they are not functioning properly. Quality Loops also provide you feedback to determine if your Systems may need to be re-engineered or redesigned. This entire subject of fully developing and optimizing systems throughout your company is key to providing a sustainable competitive advantage so you can duplicate your desired results time after time.
This entire area of resystematizing your company is one of the components of instilling innovation in your organization. While the expansive topic of innovation is outside of the purview of this discussion (my next book will cover how you weave innovation into the very “DNA” of an organization), I would like to discuss the concept of “being the best in the world” that Jim Collins covers in his book Good to Great, as it relates to systems.
Being The Best In The World
While being the best in the world is a lofty goal, it is not realistic for all but the largest companies. However, by properly systematizing your business, you can become the best in your city [fill in the blank], then the best in your county, then your geographic area, then your state, etc. The concept of being the best (or the foremost expert) is still applicable to smaller businesses; you just enlarge your target area by being the best as your enterprise grows.
The important thing is that you should not accept mediocrity in your company, but instead to use these concepts to “be the best” and thereby create the business of your dreams.
Where to Start
Start by adopting the mindset that “How you produce your product is more important than your product” and then fully realize that “Your business is your product”. Next ask the question, “What is our product?”
This should lead you to view your company as product sitting on a shelf that is available for someone to purchase. That in turn will drive you to evaluate your company with the overall goal being to create an organization that is extremely attractive to a potential acquirer.
Finally, so that you know where are at on continuum of fully meeting your customer’s needs, you want to track relevant operating Metrics and fully implement the concept of Quality Loops, which are necessary for improving and re-systematizing, re-engineering or redesigning your Systems.
If you need assistance with implementing the concepts of How you produce your product is more important than your product and Your business is your product, please contact us using the below information so we can show you how you can transform your company through these concepts.
Fountainhead Consulting Group, Inc. is an Innovation and Business Growth, Scaling, and Planning firm. During the past 21, years we have shown over 1,200 companies how to achieve their goals by using our unique, comprehensive, and systematic FastTrak Innovation Program™,Innovation Academy™, and Structure of Success™ methodologies. Using the components in these methodologies, each month we examine an aspect of how to transform your business or organization into a true 21st Century enterprise.
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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.