Overcoming the macro trends and mastering the micro details (the M&Ms) is no longer an excuse for your business to flounder or fail.  In hindsight,  it is always easy to see the macro trends and micro details that form your business landscape, but effective managers need the foresight to act on M&Ms or seek advice before it is too late. This is not to say that it is always easy.  It reminds me of the frog in boiling water adage. The boiling frog is an anecdote describing a frog slowly being boiled alive. The premise is that if a frog is put suddenly into boiling water, it will jump out, but if it is put in cold water which is then brought to a boil slowly, it will not perceive the danger and will be cooked to death.  Our objective is to not be that frog.

Macro Trends

I owned a profitable brick and mortar specialty toy store chain in the Bay Area that succumbed to the macro trends.  The business model was based on providing customers with wooden, heirloom, old school and educational toys, games and books.  Our customer base relied on me and my buyers to research various specialty items and provide them with a unique mix of toys and games for their children and grandchildren. Two macro trends disrupted my business strategy. First, the continued growth and pervasiveness of the internet.  Amazon, who’s strategy was initially a high volume, low to no margin business with investors and venture capitalists absorbing the losses destined to provide every product possible, expanded the reach into my niche and the niche of many other retail businesses.  Suddenly, customers who previously depended on my stores for unique products, could go online or to Amazon specifically and find my previously hard to find toys. Amazon and their online competitors well selling my toys and games cheaper than I could buy them from the manufactuerer or with next to margins.  Additionally, in the beginning, online retailers didn’t pay sales tax.  Some customers would shop for products in my stores use my sales associates’ knowledge and then buy the product online sometimes from within my store itself.

Second, was the coming of the iPhone and iPad.  Before the iPhone and iPad, my stores catered to children up to thirteen year olds and sometime older, but that was all about to change. Parents started to use the iPhone and IPad as babysitters for children as young two.  Middle schoolers were increasingly using texting as their primary form of socialization; no longer going outside to play games and interact with one another.  Pre-teens now wanted an IPhone instead of a Lego set or a cherry wood play kitchen and with the advent of social media the conversion from toys to gadgets was complete. Toys were no longer the items the children most desired.

Micro Details

I recently completed a consulting engagement for a business that was failing for an entirely different reason than missing the macro trends.  Their issue was mismanaging  the micro details.  What are the micro details? You are probably asking.  They are the key performance indicators for your business, the processes and procedures that ensure profitability, and management qualities that engender the employee loyalty and dedication necessary for the business to succeed.  Unfortunately, management had designed the correct business model for the business but was unable to execute the most basic of business activities.  This business never tracked inventory or understood the gross profit margin for each of their items until their last year of its existence.  This does not mean that management was totally ignorant.  Management knew they were lacking, but they were both unwilling and incapable of completing the blocking and tackling essential to design the necessary policies and procedures.  Upper management was paralyzed by its lack of knowledge and therefore unable to implement the procedures necessary to achieve inventory control and gross margin management that would have ensured the business’s success.  Additionally, management tended towards micromanagement even though they were not evolved in the day to day of the business.  By the time they hired me, the business had been in financial trouble for many years.  When I got there they were tired of losing money and had lost the patience required to implement all of the changes necessary to turnaround the crisis.

Businesses may falter or hit troubled patches for a variety of reasons. Some, like mine, get caught up in societal and economic change.  Others, like my client’s, suffer from the mismanagement of the details.  When you are the one in control of the business, it is sometimes hard to tell where is up and what is down and not to become the frog.  Take a breath. Are the circumstances affecting your business external to your business or internal to your business?  Are your competitors also suffering?  If not, why not.  If your business’ sales deficiencies are due to macro trends maybe it is time for you to think about an jumping out of the water.  Now, maybe the timing is not right for an exit strategy, so a complete change in business strategy might be needed to maintain viability.  If you determine that you need to do a better job of managing the micro details, do have the money, determination and the stomach to turn it around.  Can you acknowledge your own mistakes and keep a positive attitude?  Then change is possible.  Some changes are minor and can be fixed in a month or two whereas others might take a year or more, but if you refocus on the micro details then profitability is on the horizon.  Otherwise, again an exit strategy might be in order.  No matter whether you are facing macro trends or micro details the solution to your problems are around the corner.  It might not be easy, but it is possible.  So the next time you are eating your favorite M&Ms, think evaluate your business M&Ms.