Understanding your business is the key to success
In the final part of this Two Part series Andrew McCombie, managing director of Cornerstone Consulting, explains how you can position your business to achieve maximum growth.
By Andrew McCombie
In the first part of this article I talked about focusing on your business Vision and
comparing this to the Current Reality.
Having done that, it’s now time take the new insights, develop Actions and Implement
changes to reap rewards.
Vision → Current Reality → Actions → Implementation → Review and Manage
Take a look at this process, which is my method of overcoming any barrier that prevents your business performing. If you have a problem or weakness in the business, then gain some knowledge about that problem, work out some Actions and start to do something about it.
There are all sorts of barriers to improving a business such as; mind set, cash flow, staff issues, being time poor, industry change. A major business decision is rarely made without some level of angst or perceived risk and often it’s a leap of faith based on instinct.
No matter what the barrier is, it’s important to approach the problem in a systematic and well thought out way.
The following process of: Vision → Current Reality → Action → Implementation → Review, will reduce the angst and risk and provide a great safety net which reduces reliance on instinct.
Developing Actions is about seeing a problem and thinking about solutions. A good set of actions will absolutely lead to business improvement. Try perceiving weaknesses and
problems in your business as great opportunities for growth.
I have seen people unable to make a decision and then once they eventually did decide on an Action, it totally turned their business around, with the benefit far outweighing the cost. A frequent comment is: “Why did we wait so long to do this?”.
Find a problem and ask the following sort of questions:
- Why is it a problem?
- What can be done to fix the problem, what are the choices and alternatives available?
- Is my information complete, do I need to get more information about an issue?
- What is the cost of the Action?
- What is the expected return or saving from the Action?
- Can I exit from this Action?
- Are there existing resources to fill the gap?
- What resources (assets) do I have available?
- Does making this decision impact another part of the business?
Develop Potential Action
By answering the questions, the potential Actions start to come into focus.
Problem: production is down because staff have not been adequately trained.
Action: Train staff
Problem: New environmental laws concerning a chemical used by the business.
Information required: Details of the law, alternative chemicals, new processing technology.
(by answering the questions, you may get an idea of the action required)
Action 1: Remain as is because by paying an environmental levy the business is exempted from the law.
Action 2: Do whatever is best for the environment (align the action to company values / Vision)
I believe any problem can be thrown at this sort of process and Actions will become clear.
Implementation of Actions is obviously crucial to success yet it’s arguably the most difficult part of the process.
By developing well thought out Actions and understanding how these relate to your
business, Implementation is made a lot easier.
However you will still require a plan and a framework for getting things done. The idea is to work out how each Action is to be implemented and the following will help:
- Staff required
- Outside help
- Other resources
- Project outline
Often a board of advisors is a great way of providing structure to the implementation
process. By meeting once every two months a board of advisors can provide accountability and direction in your business.
Throughout this process there is a need to Review and Manage decisions. This is not a step in itself but a constant process of reviewing the Vision, the Current Reality, Actions and Implementation in order to ensure the process is working and also whether any changes to the original plan are needed.
It’s all about staying on top of the process and remaining in control.
*Andrew McCombie is an experienced business advisor with a background as a Chartered Accountant and Tax consultant. As the founder and managing director of Cornerstone Consulting, Andrew created an advisory firm which helps small to medium businesses by providing practical and insightful strategies for success.
Ph: 02 99653772