In 2007, Microsoft CEO Steve Ballmer laughed at the iPhone
“Five hundred dollars? Fully subsidized? With a plan?” he exclaimed in a 2007 interview, shortly after it was released. “That is the most expensive phone in the world, and it doesn’t appeal to business customers because it doesn’t have a keyboard, which makes it not a very good email machine.”
That was September 2007. Today, not quite five years later, the iPhone portion of Apple’s business alone is bigger than all of Microsoft.
Kodak invented the digital camera in 1975 but dropped it for fear it would threaten its film business. If they hadn’t have done so, they could have dominated the industry and still have a thriving business. Kodak once said, “We don’t sell film, we sell memories.” The company who made “the Kodak Moment” part of American culture forgot who they were.
In my last article, Act Like a Salesperson and Sell Something Already, I quoted legendary consultant and author Peter Ducker:
Because the purpose of business is to create a customer, the business enterprise has two—and only two—basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs.
Let’s talk about each of those.
New businesses characteristically fail at an alarming rate. Between 2007 and 2010, the failure rate for U.S. small business rose by 40 percent. Yet, according to the U.S. Small Business Administration, companies with multiple owners are more likely to survive longer than sole proprietorships. What’s more, a 2008 study showed that the average revenues for partnerships increased 157 percent since 1980, while revenues for the average sole proprietor decreased 51 percent during the same period. The study also reported that the average sole proprietor’s net income in 2008 was around $12,000.
The facts seem to make the case for partnerships, yet 72 percent of small businesses are sole proprietorships. Partnerships have their pros and cons, and at first glance, the pros might seem to outweigh the cons. Yet, a partnership gone bad can make you wish you’d never gone into business in the first place.
When it comes to strategic vs. tactical planning, it’s easy to fall into either/or thinking – that is, either strategic thinking is better, or tactical thinking is better. This is especially true when you realize which type of thinker you are. We tend to believe that our type of thinking must be superior. But regardless of whether you are a strategic or a tactical thinker, you must come to realize that both types are critical to success; and you must learn to appreciate your business partner and/or your employees’ way of thinking and value the contribution they can make towards accomplishing your goals.
So when I use the term strategic vs. tactical thinking, it’s not to imply that they are at odds with one another; rather it’s to contrast the difference between the two, so you can begin to distinguish and appreciate those differences. It’s also critical to recognize when you are not applying both types of thinking to the situation.
Let’s face it… if you’re in business, you need a plan.
You did create some type of business plan before you set up shop, didn’t you? If not, I highly recommend you do so now. Go ahead, I’ll wait…
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Thanks for visiting. I’m a Marketing Evangelist, Blogger and Sales Trainer.
I get excited about geek stuff. But I’m also passionate about helping people and companies reach their fullest potential and becoming wildly successful.
That’s why I love helping businesses figure out how to market (especially web marketing) and why I train sales people to be the best they can be at what they do.