Saturday, December 22, 2012

Exit Strategy

“There was a phase in my young life as a photographer when I would shoot every object that comes into view. It was good practice, invaluable training, even. 

Now that I have grown comfortable with my camera system, know more or less how to play with light, I try to push myself beyond every comfort zone I find myself in.

It was therefore quite a treat to put together a bland looking window on a fire exit door with a gorgeous woman

This was narrated by a friend of mine - an ideal example of exit strategy.
You got to figure out when to exit…move out from your comfort zone…take new challenges…in order to grow…in order to excel. Exit strategy is needed in everything you make an entry into, if you don’t, that’s the time you feel stuck. This post will talk about why exit strategy is a must for the below:

Partnership Alliances:
You can never win in today’s industry by being an individual player, strategy alliance with other business gives you an edge to fulfill customer needs and excel. Every partnership that I sing off brings in lots of excitement along with commitments. We sign off Win-Win partnership deal, decide on Go to Market plan, but never plan on defining the exit strategy.

What if the market does not respond positively to the partnership?
What if only one partner succeeds out of the deal?
What if the market circumstances change and the partnership backfires?

To proactively act in the above situation its important while designing an alliance best moment is to talk about the exit strategy.

When thinking of the end of a product’s life, think of the principles of product life cycle management and the four phases of a product’s life cycle. There’s the introduction phase, the growth phase, a peak phase, followed by a gradual decline phase. 
An exit strategy for a given product line typically involves outlining the company’s steps to reducing its exposure. Using customer reward programs, prompt payment incentives and offering volume discounts, are just some of the ways to retain business. The intention here is to maximize the product’s gross profit during its final life-cycle. In telecom I see a new product killing another existing new product launched from the same brand.

It’s important to predict eventual decline in customer demand, accordingly reduce the products marketing expenditures, reduce inventory and move the product line to“made-to-order” status. Support & Maintenance for the existing customers using the product is primary in exit strategy. Either move them to the new product or set a deadline for the end of support dates. Oracle products are the best example for the same.  

I know it’s debatable, why would one need an exit strategy for a relationship? Who wants to step out it? Why work on it?

But look at it in 2 angles:
Exit strategy for being friends to moving on to be in a love relationship. Exiting from being just lovers to a married couple. Exiting from just being a couple to a family etc. Figure out when to exit from one kind of relationship to another.

Other angle is when you realize your integrity is no more secure. During getting marriage discuss the divorce scenario when heavily in love, it is the best time. The moment the love is over and all what is left is disagreement and difficulties, it will be much harder to find a common ground based whereupon both partners can exit gracefully. Having a plan ready in advance will save emotional energy when you're feeling sapped from fighting.
Unexpected swings in the relationship can create distress and drama. If you have a relationship that you value, sit down with the person while things are going well and create an agreement on how you would handle your worst case scenario. What would you like to see happen, from a calm rational place, before you end the relationship. An exit agreement can clear a lot of bandwidth we can use for other fun activities, and let us enjoy the moment in the relationship now!

Your new venture is off and running. You and your partner are in sync with your goals for the future. As hard as it is to imagine the ending when you’re just beginning, an exit strategy belongs in your business plan, it can actually help you improve your business, making you look at cracks in the foundation of your company that need reinforcing and new methods to help you push your business even further in the right direction. 

Plan for what happens if one of them dies. 
Define what happens when one partner is ready to walk away. 
Worst scenarios for dissolving a business partnership is when the partners are locked in a dispute and the only solution is splitting. This is a time when emotions can run very high and having the terms of the dissolution already in place limits additional conflict.
So what happens to the partners when your small business becomes bigger either by merger or by sale?

What if somewhere down the road one of the partners is ready to take it all on alone and wants to buy out the shares of the other? A carefully crafted plan will lead to a smooth financial transaction. Having a clearly defined exit strategy does more than just establish the rules for different end-of-partnership scenarios. 

I am guessing that at the beginning of your career or even at the end of your corporate one, you did not have any idea that you would end up doing this for a living. I used to have a mental box of where my career could “logically” proceed, until I realized that I love learning new things, working on challenging stuff.
So my advice to you if you do not know what you want to do…Congratulations! It is perfectly normal. I promise you few really know their life’s purpose early on. It is a work in progress and that’s what makes life so beautiful. Second, be patient and have fun and explore. Try new things, learn constantly and allow yourself to imagine, to brainstorm, to come up with ideas and to put a few to test. Also, pay attention to your strength. That’s something that you do well consistently and feel energized and happy about.

We have got to be open to the possibilities and the opportunities that come along or else we will miss out on great chances to reach our fullest potential. I always wanted to make my professional smooth exit so I took my time building what I believed was imperative to that: a smart exit strategy at every job that was interesting, different & challenging.

Exit strategies aren't failure missions; they help to reinforce what you are doing right and focus on what you can do better. 

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