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Tuesday 27 September 2011

How can businesses survive in today's economic climate?

In the article “Has Western capitalism failed?” the BBC World Service’s Business Daily programme asked a number of leading figures if they thought whether the Western-style capitalism failed. The answers (and some of the comments) are worth a read. It would appear that those interviewed by the BBC are unanimous in their comments that the system itself hasn’t failed, but rather its interpretation by those who use it.


In my view, Business is not all about systems and targets – it is first and foremost about people. In my work with business owners, I ask them all one fundamental question: “Why does your business exist?” The answer is unsurprisingly predictable: “To make money!” I don’t think that there is anything wrong in wishing for personal prosperity; however, if the reason for existence of any business is only to accumulate wealth for its owner, then the current economic situation we are in should not come as a surprise to anyone. It is only after further discussions with business owners that we discover other values. Living by these values, prioritising and communicating them to your team and implementing them is a different matter. However, I think that once the values and attitudes towards owning a business have changed, then business owners’ approach in running their ventures may change too.

By looking at a business as an entity (or a person, if you will), who’s reason for existence is to serve and help its customers by providing them with its products and services might make business owners view it differently and ensure that the business has the freedom to grow and prosper and it gets what it needs to continue helping customers, rather than continue serving its owner only. Put it this way, if we (the West) abolished slavery by the early 19th century, then why do we still keep our businesses as our slaves in the 21st century? Ultimately, by neglecting their ventures and focusing on their own needs, business owners become slaves to their own businesses when the business is exhausted and tired and no longer capable of supporting their lifestyle in its current form and becomes a burden to owners. Disappointment and panic set in and business owners push and pull and kick their businesses to work harder to keep providing for them and try to borrow money thinking that it will solve all problems, when the truth is that it may not be the money that the business needs.

I think that every business has the potential (and the right) to grow and be prosperous and such potential is only limited by its owners. I also think that any business can survive in today’s economic climate by changing the way it is structured and run, reviewing its values and ensuring that it has everything it needs to be stable and profitable. Such a process is not a quick fix and may require some time and business owners need to think if they are ready to commit to these changes and to their businesses and the sooner they realise it, the sooner they may enjoy their own prosperity.

But what do you think?

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