“Change is a constant in business. But when faced with exceptional events, leaders need to take a hard look at their tools, systems, processes and—most important—strategies.” Oracle NetSuite - Managing Business Uncertainty Guide
The constant change in our environment and in particular the events of 2020 teach us that we must adapt to the space if we are to survive as a business. As you get into your car or walk into your kitchen you see various bits of data. Elements the give you an understanding of the state of the environment that will enable you to maximize it for the objective at hand. Getting to another location in the case of the car or cooking a meal in the case of the kitchen.
Both perform better and allow you to achieve your objectives, if you have indicators of their ability to function. The dishwasher tells us when it is completed its work the coffee maker when it needs cleaning. In the case of the car most modern cars will indicate that you need an oil change, or if its electric it lets you know it needs to be charged and the estimated distance left at current speed and energy usage pattern.
It's 2020 why can’t we do this for our business?
Data is the bloodline of the organization we use it every day for decisions all the time, why not leverage it more for better understanding of the business itself.
In our organizations we leverage data to make decisions about delivery of our products and services. This data is constantly honed to provide a better understanding of the customer and deliver ever more useful services. However unlike our cars, the coffee maker and dishwasher we usually have little indication that the business itself needs an overhaul or an update. Systems need to be serviced and tuned to the changing environment.
Usually by the time it's realized that an internal system is broken or needs updating its too late. The organization has been bleeding out the side for a while or hemorrhaging to use another human term. It now requires radical surgery to repair. This usually means a “very expensive” consulting team attempting to repair the damage caused by a lack of information or analysis on the organization’s health. Unlike our cars, coffee makers and our bodies the business has no real early warning signs ie “lights on the dashboard” that we actual see and can definitely pay attention to with specific action.
Using tools that enable us to analyze the core functions of the business and streamline the organization for more effective throughput, facilitates better service to our clients and ultimately a more profitable and sustainable business.
There are 4 core areas that give a clear view of the heath of an organization.
Strategy - Where is the organization going, what is its purpose, its products or services its customers. This may seem obvious, but beware the environment has changed and quite possibly so has your customer, along with the optimal way to function regarding that customer. The understanding of the organization itself needs to be articulated that so that all arms of the organization are clear on the mandate. At this juncture with clarity on the organization’s direction and current approach the various arms are able to adjust an optimize.
Implementation - Can we actually implement the thoughts of the strategic direction? Hmmmm, The marketing, processes and sales required to realize the strategic objectives? The components of our internal operations, are they healthy enough to run the marathon that is the new year or are we just in for the sprint and be done in short order? In other words are we designed for sustainability into the future? Understanding the component parts of the organization that need to be optimized for delivery of products and services, tuned to the changing environment enables sustainability and growth. Being able to measure the optimization of the implementation components of the organization and re-tune them to the changing environment facilitates an agile organization that is both aware of itself, and the environment, making it more resilient over time.
Money - There is a saying in business, “cashflow is king!” this is true. The flow of cash through the business is critical to the organization’s longevity. Knowing the financials is good, but managing by the financials is better. Leveraging the financial input along with the funding lines, such as cash to operate and profit margins and understanding the processes and having a marker that you can respond too is critical. We are not talking just the lag indicators i.e. we have no cash, but lead indicators that help you understand what actions need to be focused on to ensure cash a positive position. Knowing what needs to be done and projecting a financial path forward in alignment with the strategy provides key protection against economic shifts. As the saying goes knowing is half the battle.
People - All this does not work without people. I have a saying “its always about the people”. People are important they are how you make your product, deliver your service. The team that makes it all happen for your business. The culture, team spirit, compensation and hiring all come together, to ultimately provide the service or product to your customer, which incidentally is also a person:). Measuring not just team performance, but designing a culture that nurtures the kind of environment that is appropriate for your vision is sustainability itself. All the big companies that have been around for a while or even smaller companies have a culture. The truth is with the right understanding you can choose that culture. You can design the culture you want and measure how you are doing with it.
Being able to measure across all these simultaneously and plot a way forward that improves your organization is not just useful, but a game changer in how the organization operates. Its like having a doctor and personal trainer for your business.
Leveraging across these base parameters for organizational function allow you to grow your business sustainably and continuously, improving its ability to function and adapt to the environment.
Operationalize your strategy realize your vision for your organization today! Connect with one of our team members and have a chat about how we can help you keep your business healthy.
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