Accepting Truth Is Often the Hardest First Step
Changing the path you’re on before it hurts your business is another kind of success.
By Diana L. Mirakaj
One of the most arduous parts of this business is breaking the unpleasant news to a customer that they’re wrong – about a sales strategy, a revenue assumption, or something as serious as how they run their company. It rarely goes well.
Whether starting out, starting over, or just fine-tuning, where a business stands today is a determining factor in where it will be tomorrow.
The truth may hurt, but facing it head-on is a necessary first step toward making performance improvements. If a business can’t admit that something is broken, it certainly can’t begin to fix it.
Now, it doesn’t take much to get everyone to agree on desired outcomes. Everyone wants more customers, faster sales cycles, increased revenue, and higher margins. But root causes – those things that require fixing or changing to begin the improvements – aren’t as easily identified or accepted. Many business managers want to leapfrog this step. Either they’re anxious to get to the new outcome or they want to focus only on their specific tasks and ignore other operational issues.
Owners and operations managers know their businesses better than anyone, but they’re not always the best candidates for judging a company’s current state of affairs. What’s often needed is an expert, third-party perspective to provide informed insights and options for strategic and operational improvement.
The term “trusted advisor” evolved from the idea that an outside party could act as a confidante for consultation and guidance. In reality, though, we all need another perspective at times to give us direction when a viewpoint – a business model or strategy – fails to produce the intended results.
When a new approach is needed, a few important questions can provide value in righting previous wrongs. Working on the growth of your business requires planning. Start by asking yourself these questions:
- What is the vision of the business? Are objectives aligned with that vision?
- How far is the business today from where it needs to be tomorrow?
- Who are the clients? Do they understand the company’s value?
- Is the company investing in the right areas for improvement and growth?
- Does the company’s current business plan support the vision and objectives?
- Does the company have the right resources to execute its strategy?
- What barriers to growth does the business find most challenging?
By answering those questions honestly, a company puts itself in a far better position to move toward future-state planning. Sometimes, eliminating just a few of the major barriers to growth is all that’s needed to transform a business vision into reality.
At 2112, we see some common growth inhibitors when talking to vendor executives. Here are a handful:
Changes in the playing field: Unless your business is new and the first of its kind, chances are your competitive landscape has evolved since you first opened your doors. If you’re not considering the impact of those changes, you’re limiting your ability to compete effectively. It’s always important to look ahead, but don’t forget to look around as well.
Checks and balances: Without really understanding the regulatory and compliance environment of your business, you put yourself at risk. Growth can be constrained when compliance issues negatively impact churn rate or cause distractions. Assuming that governance is only for large organizations with shareholders that demand accountability is an error in thought process. Whether a company has 20 or 20,000 employees, compliance is key.
Inadequate business plans: Business plans evolve over time. The business plan developed when it first started isn’t enough to keep it on a path to perpetual growth. As a company evolves, it’s important that its business plan be regularly updated. Plan updates include looking at human capital, investment needs, quality control, sales and marketing, and product development.
Fragmented economics: Business modeling is often carried out on spreadsheets to create project schedules, do simplified risk analysis calculations, determine cost and revenue projections, and perform other simple financial analyses. While sufficient in many cases, the output of these models shouldn’t be etched in stone. Such projections – regardless of how they originate – require frequent re-examination to ensure that they continue to support fulfillment of goals. If not, the fiscal infrastructure of a company can be completely compromised.
In the end, planning and improving isn’t about right or wrong; it’s about logical and sound decision-making. The choices that business owners and managers are faced with are far from easy. But with proper planning and analysis, as well as expert guidance, the process is certainly manageable, and can definitely lead to success. Being able to recognize when a chosen path is not taking you to an intended destination – and agile enough to react before damage control is needed – that’s yet another type of success.