A perfect demonstration of the twists, turns and uncertainty that has dominated the business agenda of late happened when we found out we were just seven weeks away from a general election.
Theresa May’s announcement may have come as a shock, but whatever the outcome, at least it should bring more clarity to the business world. While unemployment has fallen to the lowest levels in more than a decade, and the economy has continued to grow (by 0.6% in the last quarter of 2016) thanks to consumer spending, business has been suffering in the post-referendum climate. According to May, the snap election was supposed to bring pre-Brexit stability to the UK – something much needed by an entrepreneurial community upended by home turf debacles such as the recent revision to business rates.
While the election may eventually turn out to calm the storm for small businesses, nothing’s certain in this uncertain new world. Instead, firms can try to future-proof themselves against an ever impending and unpredictable tomorrow by looking at the operational principles of the business itself.
Despite the deluge of business philosophies that have emerged recently, two ways of working stand out as particularly useful in volatile conditions; agile and lean.
The agile business philosophy has its roots in The Agile Manifesto, a set of twelve principles laid out by a collection of software developers at a ski resort in Utah in the year 2001. As the name implies, agile small businesses are built to react quickly to situations – whether that be the launch of a competing product, or a macro event on a national, or even global scale (did someone say snap election?)
Traditionally, agile developers would create products in ‘sprints’, rapidly creating software in short periods of time to launch on the market. While this approach relies on technology, the same principle can be applied to all sorts of small businesses, whose leaders can focus their efforts into creating new, innovative and relevant products and services in small pockets of time.
Agile small firms are generally conservative with capital, as saving for a rainy day enables them to quickly deploy their ideas when opportunity knocks. Taking time to review the company – both from a management and a financial point of view – can ensure that the firm has access to flexible resources. By making it easy to take on new staff or freelancers when required – particularly important for time-focused businesses such as consultancies – firms can pivot when the time comes.
The lean machine
While the agile philosophy was born from software development, the lean principles of business originated from manufacturing. Being lean is less about fast deployment, instead concentrating on margins; fine-tuning iterative products and services while eliminating superfluous costs.
The lean methodology has many supporters, from the smallest start-up looking to grow without giving up equity, right through to agencies within the United States Government.
Those following this lean model look to shorten development cycles by creating pilot products, which allow users to understand crucial insights into their customer base without expending a great deal of time or effort. They also embrace split testing, in which a select audience are offered two versions of a new product to choose between. Of course, these elements of the lean ideology require sound financial planning, ensuring that time and money are being spent in a way that still justifies following the lean philosophy in the first place.
For small businesses, becoming lean can be a good way of reducing waste, continually improving products and services, and preparing for an eventful future.
Business success isn’t a blueprint and if the past year has taught us anything, it’s that nothing is certain outside the proverbial death and taxes. But taking ideas from different business models can inspire business leaders looking for a new direction in uncertain times.
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