While working with a group of wicked smart CEO’s this week, we drilled down on the business model of the host. When they started the business 10 years ago, they were way ahead of the competition in how they went to market. They were first on the internet, and enjoyed excellent margins for many years. Now they are faced with a smaller demographic market for their products and the competition looks like them on the web. Prices and margins are falling, and they have to focus hard on their competitive advantages.
If this sounds like you, you are not alone. The sad truth is that companies have life cycles just like people. If the rate of change inside your company is slower than the rate of change outside your company, you are in trouble.
When was the last time you asked hard questions about the advantages of your business model in today’s environment, and 5 years from now? Get a group of wicked smart peers together if you don’t already have them (like Vistage) and drill down. Everyone will learn in the process.
*business model: what you do, how you do it, for whom you do it, and how you make money.