Relating HBR's "four principles of enduring success" to FnR ~ Sounds + Food 'n' Retail

One of my current activities is trying to relate everything I learn to the field of HnR, because I believe that the more I know, the better prepared I will be when I start my own venture. This has consequences on better execution and will make it easier to attract investors / partners as well, not to mention run a better business.

The latest Harvard Business Review has a somewhat interesting, yet quite academic article on principles of long-term success. They are:

1. Exploit before you explore
This is actually probably the most important principle in running a start-up. You are running with very scarce resources and maintaining cash-flow to pay for expenses is an important priority. 
In a FnR environment, I think this means: making the best of spaces, by re-using them or otherwise; making the best of people within your organisations as those will mostly be the ones with the strongest values (That said, I don't believe in exploiting people!); it also means making the best of innovations already on the market. What it ultimately comes down to, is a focus on exploiting quality and not constantly running in all directions looking for new things.

2. Diversify your business-portfolio
HBR does stress that diversification is pointless if you do not benefit from economies of scope. In plain English, this means that diversification only works if all these activities can somehow be combined efficiently in the package that is your enterprise.
In a FnR environment, if you can offer the customers products that complement each other, you increase the level of service, while making use of existing resources, like sales, warehousing, marketing. This is a very dangerous area to exploit, and must be carefully prepared.  
Other areas of diversification include supply-side and geographic.

3. Remember your mistakes: Again, very relevant to start-ups, as at that stage it is very easy to make mistakes. What is important is to avoid repeating them and have that be reflected in the strategy and structure of the business.

4. Be conservative about change: What this means is not to not change, but instead base it on sound preparation. That means preparing a business-case and evaluating the consequences this can have your employees as well as the outside environment. When expanding to other regions, it is also very important to see whether your current strategy matches the local culture.

I do think these principles are somewhat stale and perhaps difficult to relate to small or starting business in the food or retail sector. If I were to summarise the lessons in a few words, however, I would say: be careful about the strategy for a business, evaluate everything possible and only implement changes if they make business sense. It is equally important not to lose your core-values and your vision in too much change and always weigh the consequences of actions, in as far as that is possible. 

The article can be ordered here: The four principles of enduring success


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