Basic Business Cents
Everyone would like to find the magic recipe to improve his or her business. I have a secret; it doesn’t exist unless you consider thought and subsequent action a secret. Deming said people hope for instant pudding. Kano said improvement is a hot and sweaty job.
Maybe it is not so hard if we break it down to the three major business areas, marketing, production, and finance, and then work on those areas.
All work is composed of a series of processes. There is a tremendous breakthrough when people understand their processes and then seek to flow chart, improve, replace, and/or innovate better processes.
This certainly applies to marketing, which includes sales, promotion, advertising, networking, and planning. What works and what doesn’t work? Improve continually those processes that work and stop or cut back on those that don’t work to bring desired results. You probably would be better off replacing some marketing processes as the field of marketing is changing rapidly with electronic media rapidly bringing new marketing opportunities. Be critical of your marketing actions; if you are doing something solely because that is the way it has always been, you can be assured that it is wrong.
Production is a broad term; I use the context meaning of performing the transaction of the business, the changing of input into output. It can be the assembly of a product, the performance of a service, or the movement of merchandize in retailing. Start by identifying the major processes of the business and then chart all the action steps in each process. Once you see it in black and white, you will inevitably find ways to streamline and simplify the process. You will be looking for ways to remove complexity, improve quality, and improve throughput, or simply put—better, faster, and cheaper.
Finance is typically thought of as the reporting of the results of marketing and production, but it has a bigger role. This means its processes can also be improved. Certainly it means the reporting of the revenue and expenses with the resulting net profit and cash flow. It should also detail a pro forma projection of these four elements for the next year as a minimum by month. Without this prediction of the future, it is like driving your car by looking in the rear view window. With this financial forecast, management can see the effect of their decisions by the impact on the future projection, thereby making it the most valuable management tool at their disposal.
This brings us to leadership. Leaders need to set the example by charting, improving, replacing, and innovating steps in their work processes. Leaders are the role models; people will follow their actions, not their words.
Maybe there is a magic recipe after all; it simply involves time, thought, and effort.