Did you know, 70% of businesses used some form of intelligence before failing?

Whether your systems use artificial intelligence today or whether a service provider and a team of merry men provide the promise of intelligent systems tomorrow – transformation is inevitable if business growth and sustainability are a part of your strategy.

Transformations are increasingly becoming a key part of everyday business, whether you are an entrepreneur, small business or a large enterprise - change is the common ground all businesses stand on. I think it is evident, that all businesses evolve daily, and to remain in the current state will rarely equal an equitable future state.

Whatever you call change, whether it be business transformation, pivotal modification or a turn-around, they are the new North Star for businesses, and can invigorate growth, provide cost benefits and hopefully reduce the cost of doing business, when performed - well.

In most cases, businesses are often found implementing change to either defend their existing market position, reduce over heads and expenses or grow their existing and new customer base – it is an ongoing dance in the competive global business landscape. If you are a leader in your organisation, I highly recommend you embrace reality and adopt a realistic perspective to your strategic direction. Avoid at all cost sugar coating the inevitable changes required and build a wholesome honest approach with insights into the current state of your business.

The reality is implementing change and turning a business around is not a simple task. It will require a measured wholistic approach that understands the complexities and risks. The challenge is that very few internal and external resources can truly understand the risk of change to a business – unless they are truly interested or truly invested.

Financial performance – Driving Change.

Most people will likely tune out of this post at the thought of numbers and financial jargon. However, the fact remains that balance sheets and income statements are simple financial reports that all businesses need to understand. They are a key catalyst for identifying the need for business change and help provide factual decision-making data.

The continued failure rate of the SME sector in Australian is consistent with the global business failure rate and contrasts by a few percent. We may have less businesses in Australia but, we fail at a similar rate according to the SBA – why?

• Why do, 30% of SME’s fail in the first 2 years?
• Why do, 50% of SME’s fail in the first 5 years?
• Why do 70% fail after 10 years in operation?

Why is this percentage of failure increasing as businesses matures?

When you do the math, and you realise that there are 2.3M SME’s in Australia alone, you understand the magnitude of wasted potential we are all dealing with.  

Again, true insight into the numbers, is the key measure of business performance. It is not the only measure, but it is a key one that most SME’s and enterprise organisations live and breathe by. The numbers provide a level of certainty that allows honest questions to be asked and fact driven enquiries to be made. When measuring true profitability, the fact remains that a larger percentage of businesses are failing in comparison to those that are succeeding - this is a global fact.

It's not surprising, that businesses who fail and end up disappearing into the abyss often have no clear understanding of the failing aspects of their business or strategy. Most failed going concerns also know as businesses, attribute their demise to a series of avoidable events that crept up from ‘no where’ – importantly, there are legal ramifications to talk about knowingly operating a failing business. This avoidance to discuss business pain or failings in my opinion, stops most businesses from openly seeking the help they need – does this sound familiar. An EQ oriented reader can likely see the pattern of behaviour that exists at the individual perspective and how the avoidance of a current state inevitably leads to the failure to overcome, what can often be a turn-around in events.

It's equally not surprising, that businesses that fail with large debt in toe, have often sustained a strategic direction that in hindsight was littered with continual loss - and sustained in hope that things will work out.

So, is financial viability an elusive goal for 70% of SME’s?

Or is our egocentric limiting insight and approach to business decisions the real cause of failure?

Get over IT – and I recommend we all quickly embrace the positive results that AI and machine learning will have on the global business landscape.

I have no doubt, that emerging software defined technology will have a real sustainable impact, in the form of systematic intelligence. This is not artificial in any way, this is factual, systematic diagnostic, pattern based, psychometric decision making combined with unstructured data sources and contextual translations that will evolve to help improve our insight into business failure among a number of other problems we need solutions to - this you will struggle to find in a timely fashion from people.

Leave your ego at the door, before you go to work.

The concerns that AI and Machine learning will remove people should be welcomed by the global business economy, as failure can ultimately only be attributed to mankind? Brace yourself - AI may in fact remove the need to have certain strategic, management and various business resources change or better yet, be removed from the balance sheet and income statement all together. This is good, for all businesses isn’t it? If you answered no to this question: T-R-A-N-S-F-O-R-M 10101101011101001: PIVOT: CHANGE is required, and an honest and authentic assessment of your current state and future state strategy is needed – now!

Based on the global business failure percentage rates, there is no question that most businesses need a transformational strategy. Is change required, it should be an unquestionable and a continual – YES.

“She’ll be right – we’ve got it down pat” - 70% said that at some stage during their 9.9 year in business.

Does it surprise you, that most professional managers reject negative perspectives as they choose to maintain an optimistic outlook? I’ve sold millions of dollars in technology and services, and a 'positive outlook' works well and is great when looking to inspire growth or change a negative perspective. However, if you are an ostrich, or you have your head in the trough with little regard for the true financial forecast of your business, your partners business or your customers business then change is your friend and sadly, if managed poorly will be your frenemy.

I have learnt that the gun barrel - straight bat and honest perspective is the only one worth listening to - "the truth doesn't need any sugar coating."

No one deliberately sets out to fail in business, unless they are on the inside and trading on a bear run, which is rare – I think.

Who benefits when businesses fail?

The potential for the global markets to enter what can be termed as a head spinning transformational period is highly likely, caused by nan and pop or mum and dad who have worked their arses off and are now finally retiring at 70 years old, if they are lucky. The baby boomers firmly hold the keys to remarkable knowledge – some share it openly – some take it with them, some have forgotten the lot. As they leave the business landscape, the void will be obvious. As they head into retirement and step away from the wheel, they take with them a trough full of cash, predominately driven by a property market that has favoured their generation considerably - this is a game changing, generational and capital reality.  

So – let’s get on with it - and accelerate our initiatives and build sustainable businesses amid the inevitable transformational change that will continue to build a momentum for businesses worldwide.

Have a ball as you seek to be the solution to your customers need.