More of the Same

Over and over I see businesses trying to get different results from doing more of the same.  Sales are down?  Add more sales people. Profits are off?  Cut costs and lay off.  Competitors are slashing prices?  Follow suit.

Businesses must be strategic in their decision making.  Automatically taking the same actions which have worked in the past or are “traditional” approaches to dealing with adverse business conditions can be costly or even deadly to your business.

Reaction can be turned into pro-action if you establish a process for quick analysis and alternative identification and assessment within your organization.  This doesn’t mean instituting processes which lead to analysis paralysis, but it does mean seeking out data to do more than close your eyes and pray that you guessed correctly.

Pro-action means having information about your organization’s performance over prior periods and in recent weeks.  It means understanding the sources of your organization’s results on a day-to-day, week-to-week basis. When you know the internal and external drivers and factors contributing to the success of your business, you are able to put environmental change(s) into the perspective of their potential impact on your business and act quickly.  You don’t need to rely on what someone else does or adopt a typical reactive stance.

Businesses knowledgeable about their internal operations and the impact of those operations on profitability and market position are more nimble in response to changing conditions.  Underpinning that knowledge must be a clear strategic plan which enables the business to change tactics and remain on track to reach stated objectives.

It is mandatory for any business to maintain an arsenal of options to keep it on target to achieve objectives, regardless of competitive, economic, or market changes. How you develop those competitive weapons depends upon the core competencies and ability to execute that you organization possesses.

How do you change from a reactive to a proactive stance?

1.    Educate yourself to understand financial statements.
2.    Know your organization’s capabilities and how they generate financial results.
3.    Develop comprehensive internal reports and performance measures that can serve as early warning signals to trigger changes in tactics.
4.    Establish accountability for early notice on issues – you want to know when things aren’t working or getting the expected results as soon as anyone in your organization knows!  Don’t encourage waiting until it is too late to adjust tactics.
5.    Reward the communication of good and bad news…Encourage a willingness to let you know when something isn’t going to happen according to plan so you can adapt – add resources, communicate to the customer about a delay, and so on – and you can set your business up to take action before an issue escalates into a failure to achieve results.
6.    Define roles and establish accountability for individuals and groups – clearly communicate expectations and have measurable criteria to determine whether or not goals are reached
7.    Align the organization’s priorities by establishing no more than three objectives to be achieved by the organization as a whole; connect individual performance deliverables to the organization’s goals
8.    Establish an environment where not making a decision is acknowledged as a decision – one not to take action and let the cards fall as they may
9.    Develop decision-making skills in your organization by delegating authority to make decisions and take action – don’t take the training wheels off before someone is ready, but begin by mentoring team members in decision-making and how to establish when taking an action (even if it doesn’t work as expected ) is better than letting “fate” have a hand
10.    Reward decision-making and action – through acknowledgement – recognize the effort if not the result.

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