In my experience too many owners and managers don’t really understand their successes or failures very well.
Often when they are right it is as much good luck as good management… it’s throwing tactic after tactic at a problem until something sticks… breathing a sigh of relief… and moving on to the next issue (that’s not to suggest that they are not working hard because working without understanding is very hard work indeed).
Don’t get me wrong I’ll take all the good luck I can get every time (are you listening lotto gods?)… but the problem with relying on luck is you don’t have any control over it.
Being right but for the wrong reasons is a problem when circumstances change and all of a sudden you are wrong and you don’t know why. For example, if you always run a price promotion to get members in you may assume that people are simply responding to the price when in actual fact what they are responding to is the reduced risk that comes with a price discount.
And once you understand it as a risk issue you can begin to institute strategies to reduce “risk” that don’t involve simply discounting your prices… allowing you to increase your profit margins and even sell additional products and services.
Being right is only half the battle… being right for the right reasons is where the real opportunities are.
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