Shindler's Site: Building For Tomorrow, Operating For Today

by Marty Shindler

We need to be ready. The LF industry is poised for significant growth as more and more theaters are built and films are produced. Companies will need to build for tomorrow while operating today.

As I look at growing industries, I am often reminded of a comment the president of my college made at the beginning of my freshman year. "Look at the person to the left, then look at the person to the right. One of you three will not be here next year." Although many of us scoffed at the remark, he was right. The reason: one of the three wasn’t ready.

What do we need to do to be ready? For any industry to grow, the companies within it need to grow. The LF industry is no exception. Whether producing films or supporting production, companies need to have a solid business base. This is important in companies of any size, but is crucial in small or start-up situations. In a growing industry, only the fittest will survive.

"Administratively challenged" is a term I frequently use to describe entrepreneurial organizations. In many start-ups and small- to medium-sized organizations, the management is so intent on the product that the infrastructure – policies and procedures – is given a secondary role, if it is addressed at all. This inhibits growth.

Being able to produce the best films, create the right effects, offer the best services, with the right creative and technical talent is essential. But it is not enough, long-term. Without the right infrastructure, the weight of the organization will cause the company to collapse. When a house is built, what is put down first? The foundation. Without it, there can be no substantial structure. The same applies to creative and technical companies.

Ideally, the foundation should be in place when a company is started. However, it is never too late. An infrastructure can be built within an existing company. By planning for growth, you can avoid many of the pitfalls experienced by entrepreneurs with less foresight.

The most important part of the planning process is to review current operations with an eye to improving existing procedures and establishing new ones that will facilitate growth. This review will also provide a communications medium for collecting and disseminating information throughout the entire organization.

A facilitator may be required to guide the process and to keep discussions focused. Otherwise, the process could turn into a trip to Abilene.

The goal is to develop an infrastructure that can be implemented now and that can grow flexibly as the company grows. The essential elements of the review process include:

• Discussions with senior and other managers on the core team about the tools they need to do their jobs, growth issues, communications, and other pertinent topics;
• Discussions of many of the same topics with the individuals responsible for administering functions such as finance and accounting, sales and marketing, office management, purchasing, and human resources;
• An assessment of the organization’s management coverage of the primary business functions;
• Discussion and review of cost-charging and allocation practices. This includes, but is not limited to, procedures for purchase orders, time cards and payroll, invoices, equipment purchases and other expenses;
• Discussion of procedures associated with review and approval of the above processes and documents. Discussions should also consider the flow of information and the timeliness of document processing. This may seem mundane, but effective and timely document processing is critical to success;
• Review/establishment of flow of purchasing authority. An effective infrastructure provides the various levels of management with purchasing authority appropriate to their position within the company. A company in which only the general manager can sign for purchases will limit its growth potential significantly. Setting purchasing authority helps institute effective accountability within the company;
• Review/establishment of the flow of information. The flow of documents to be managed includes those generated and received in the main office as well as to and from other segments of the organization, especially if there are remote locations, such as sales offices/representatives and off-site production facilities;
• Develop a set of formal proposals to be provided to prospective customers. This helps document what work will be done and under what terms;
• Establish the format, appropriateness, and timeliness of regular financial statements;
• Review of the types of financial information available. This includes the extent to which certain reports are distributed within the organization. Your employees should be entitled to see appropriate financial information: it helps them do their job, making your job easier;
• Preparation of documentation of the procedures in place as well as those recommended for an effective communications and control mechanism.

Obviously, this checklist does not apply in its entirety to all companies, but an effective review and implementation of appropriate changes will help long term.

When this is done throughout the LF food chain and many of the links are stronger, then we’ll all be ready. Bring on the growth.