Falling for the Hype: 6 Myths for Businesses to Avoid in 2023
One of the first things an organisation does in tough times is to look for a few good rules of thumb. In addition to these tried and tested best practices, organisational leaders also look for “hypes” that promise quick wins and assured returns.
In the current economy, several companies and teams have fallen prey to this, often making decisions that are unsuitable in the long term or cannot go beyond blueprinting phase. Today, I want to tell you six myths and hype-cycle trends businesses should avoid even navigating a complex economic climate. Today’s economic environment is not conducive for mid and small-sized firms as the impact the cost of living crisis is having on their business. It is also impacting their consumer purchasing behaviour, which is another blow. Thus SME owners feel the squeeze, they cannot pass on rising costs to their customers, and on the other hand, they want to acquire business by offering more discounts. Startups are disrupting the market, and large firms are buying the market, Squeezing the Middle externally and internally. It will impact job creation opportunities as well. It is with this understanding I uncover the six hypes that are proposed.
1. Efficiency is synonymous with cost-cutting
Nearly every organisation has been under pressure to cut costs in the last few quarters. Some have faced supply chain issues due to the prolonged effects of COVID-19. Others have had to change their business models as customer requirements changed. And some, facing stiff competition from industry newcomers, had to be lean. But in a bid to become more efficient, companies can end up making hasty decisions to cut costs.
One of the most common (often ill-advised) ways to do this is by reducing headcount. Recently, large-scale layoffs have become common across industries as companies try to shrink their biggest source of OPEX. Unfortunately, cost-cutting does not always yield the desired results; for example, a smaller team may deliver lower quality or generate less value.
2. Data will always tell you the answers
While it is true that we are living in a data-driven age, analytics will not automatically tell you all the answers. Data analytics is merely a tool in your quest to achieve better business outcomes, similar to human resources, capital, and physical infrastructure. You can mobilise data to determine whether you can solve your most pressing challenges.
Therefore, investments in data strategy should include dashboarding solutions and in-house/contractual data scientists so you can ask data the right questions and make sense of the answers it provides.
3. Scale down Big ideas to fit small companies
The stresses of a volatile economy can disproportionately impact small businesses and startups. Faced with this challenge, organisations often turn to industry leaders and large conglomerates for ideas. They may try and adapt ideas that have worked at scale to a business operating on a different model altogether. It is one of the vital myths companies should avoid in 2023.
Otherwise, they risk falling into the cookie-cutter trap: a pathbreaking company grows fast and eventually spawns a cottage industry of lookalikes surrounding it without any differentiated value proposition and, therefore, no long-term viability.
4. Social media presence is a luxury
While your core product is more important than ever, the conversation around it is equally crucial. Social media helps crystalise your brand so that it is no longer just an organisational idea or a document shared only internally. Social media converts companies into thought leaders and establishes expertise at a truly scalable and effective level. Your organic social media presence in 2023 directly impacts customer reach, loyalty, and SEO!
5. Marketing is everything
On the opposite end of the spectrum, some companies believe that marketing is everything — often taking precedence over the core product/service, making it error or defect free, and your ability to support past customers. With stiff competition and a growing focus on content, companies may want to stand out through innovative marketing campaigns and strategies.
Unfortunately, paid marketing tactics can be expensive and are not always the right fit. Marketing hype can even lead to detrimental results if products fall short of perfection or there is no continuing thought leadership to support the conversation once you have started it.
6. Minimum inventory or bench size is what you need to minimise risk
Finally, this operational myth can cause businesses to capsize if they are not careful. The COVID-19 pandemic left many retailers, manufacturers, resellers, service providers and other supply chain stakeholders with overflowing inventory even as demand stagnated. Some companies have held onto these lessons and maintain minimum inventory or bench levels to minimise risk exposure to market conditions.
However, this only means you lose out on the economies of scale, such as procurement discounts, when you order in bulk. It also makes you less capable of handling sudden demand spikes and market opportunities, which could benefit your business.
Falling for hype is not a crime; in my experience, it is a learning curve for most organisations. As we come out of an unprecedented period in the history of the global economy, it is necessary to keep a good head on one’s shoulders and avoid falling for the hype. Drop me at arvind@am-pmassociates.com to know why these myths could damage your organisation.
