As I trudge through the long and some times infuriating planning process of opening the Pyth Brewing Co. taproom, my mind can't help but wander to the longer-term strategy and how to achieve sustainable success in an ever increasing competitive environment in the craft beer world. Why jamming out the business plan and pro forma (which have literally changed 5 times), I find myself referencing two great business books that I've read in the past, the first Jim Collins' Good to Great: Why Some Companies Make the Leap...And Others Don't and Blue Ocean Strategy by W. Chan Kim and Renee Mauborgne. I will caveat by saying that many of the companies that Collins references in his book have seen a decline due to failing to innovate, scandal, regulation or combination of all. THAT is why you never rest on your CURRENT laurels and success.
The biggest takeaway from Collins' work is what he calls the Hedgehog Concept. This concept interlocks three questions every business or entrepreneur should ask themselves:
- What can you be the best in the world at
- What drives your economic engine
- What are you deeply passionate about
As these three questions are defined by an organization something magical happens, your organization creates this amazing momentum and operates similar to a flywheel.
On to Blue Ocean Strategy. The premise of this book is creating opportunity in what the authors describe as a Red Ocean. A Red Ocean is described as an environment where there is bloody competition, and plenty of it. Businesses must stop trying to beat the competition, but rather create opportunity in an untapped market space. This new market space is often created within Red Oceans it is just up to executives or entrepreneurs to be creative and think about how they could be successful within an ultra-competitive environment.
The Strategy Canvas is an important tool in determining the current competitive landscape and where there could be opportunities.
While not required, these would be huge concepts to include in any business plan. It signals commitment and thought to potential equity investors and lenders giving them comfort...as ultimately they are investing in YOU. And it helps the entrepreneur think through the building of their business, ensuring long-term success.
NOW...back to writing!!!