Is success of a business based more on the decisions or the idea?
I recently attended an event where one of the speakers talked about the large number of businesses that fail. She said that most business failures are less about the idea and more about the poor decisions made. I am curious if others agree with this. I think decisions are important, but also having the right idea is critical to success.
Remember! The wrong decision could be to promote a bad idea while you are in the best possible scenario. :-P ;-)
Think about this, because traditional business men will continue to tell you to focus on decisions, as if they were separated from idea. :-P
Decisions. As Jon Bradford (director of TechStars London) says, "ideas mean nothing, execution is everything:.
Its both really.
You first need a good product idea, for what a customer or client base will want, and will be willing to pay to acquire, enough for you to get a Return on Investment over what you spend to avail the product.
Then you need to make the right educated decisions to manage your costs, be visible to your market, comply with laws as well as standards, maintain your image and presence, adapt to market changes and grow effectively.
It is a simplistic answer to a straightforward question regarding a complex subject; business.
Actually, both are important. Even a good idea could fail because of bad management. And good managers could make a bad idea successful.
Keep in mind that 90% of businesses fail because of lack of differentiation. As simple as that.
Of course great ideas are a cornerstone of business success, however ideas are just ideas unless they are executed well, so that is a reflection of wise decision-making. It's a bit of a chicken and egg story. In my experience, smart leaders set the agenda, provide guidelines/coaching and flexibility for teams to create great ideas. Then the heavy lifting comes with shepherding and shaping those ideas through an effective process of gathering consumer/customer feedback, building in feasibility and bringing to market. It's a challenging, exciting, very complex process from idea to marketplace success.
The trick will always be found in how you keep the passion for the idea alive while wrestling with the ways and means of bringing it to usefulness.
I believe these two are linked. If your decision to moved forward with an idea that hasn't been thoroughly researched or a clear, concise strategic business plan hasn't been created, failure is likely to follow. Lastly, once these two are in place executing your business, while also revising it as you go, are paramount to success.
We spend a lot of time researching what differentiates high growth businesses from ordinary growth businesses, and what is clear is that the ability of the leadership team to make timely, effective decisions is a significant factor.
If two businesses start out at more or less the same time with very similar ideas, it will be the team that makes the best decisions along the way that survive and thrive.
Effective decision making includes the ability to identify and mitigate risks which, to me, is one of the core competences every director/business owner should possess. A high growth business' appetite and attitude towards risk will be different from an average growth business, and this will lead them to make different decisions, and gain greater success.
You can't really de-couple the two. A bad idea isn't going to succeed, but a great idea can fail miserably if the team doesn't execute. So, while the business needs the right idea to get off the ground, to eventually succeed, the business needs the right people in place.
Bear in mind also that investors invest in people. While the idea needs to be sound, ultimately, investors will emphasize the team and determine whether or not the team can effectively use the investors' money. The idea doesn't drive itself.
As someone who has worked with several small startups that failed (with great ideas behind them), it is all about the execution of your project. Think of it this way - you can build the best wheel there is but if you're focusing on irrelevent details such as how many facebook "likes" you can get or your website is so poor it's hard to navigate before the wheel is even built...it's not going to make it.
I agree Jose. Both are crucial as well as your team a lot of planning and some good luck.
In my opinion the idea actually matters, but not as much as the level of decisiveness (stubbornness) of the person taking the idea to market, most ideas have the possibility to be pivoted until success is achieved. However, there is the thing of ensuring that the idea is not doomed because of a graveyard industry. Briefly: too many variables determine success, and you would need to define what success means to the entrepreneurial team as well.
Execution is Everything. I think the speaker is right, BUT, if you start out with a bad idea, no matter how well you Execute, it won't matter. I focus on Sales Enablement and Account Execution Planning. The 3 parts of Success for Most Enterprise Businesses are Relationship, Product Capabilities, and Customer Success. It does depend. Happy to engage in more conversations on this topic!
Ideas they say, rule the world. A business entrepreneur that have ideas about his line of operation will be the leader tomorrow if decisions are matched by plans. In a dynamic environment and world were everything is flux, it takes a dynamic decision making to remain competitive, profitable and relevant while ideas will ensure longevity and continued demand for services rendered or products in the market.
Yes the decision is more important than the idea. Anyone can have a great idea but it is all in the execution. In the same way a poor strategy well executed is far better than a great strategy poorly executed. Success is about hundreds of small and large serial decisions that move the business forward. some right, some wrong, but adapting each time and rapidly learning from your mistakes. the key is to make sure that the majority of your decisions are right.
The speaker is correct. Ideas are not the problem because bad ideas won't get funding to start with. Decisions about implementing the idea, especially at the higher levels, are critical to the company's success. Which vendors? Outsource or hire employees? How to deliver the product, and so on. The right mix of decisions works. The wrong mix is doomed unless changed quickly.
Business success is based on inspired action. Great decisions and ideas mean nothing without execution. Without the drive to succeed - you will not succeed. Without the resources and funds to actually execute your plans - your business will not sustain. And the road will be tougher if you are not executing through your passion and purpose.
Poor decisions in business are a direct result of poor preparation or lack of knowledge; so is crucial that before embarking in any type of business venture that you understand the business model and cycle, so your decisions are based on how different factors affect the day to day operation and future growth.
Every business needs both. The idea is the most important at launch. The business decisions are the most important for sustainability.
A key business decision for any sustainable/growing business is the establishment of robust processes. Without them, a business will firefight more than it can create.