The
Seven Steps Beyond
Ten Steps to a More Profitable Company, which appeared in Me!dea Vol. V, no. 7/8, is designed to provide the small to medium sized company with a framework that will help them succeed. After all, one does not live by creativity and technology alone. The business perspective as a base of operations is vital for success, success being defined as profitability over an extended time. Revenue growth alone is insufficient.
Haphazard growth in the end will bring a company down, unless, of course, there is an open checkbook mentality on the part of the investors. Unfortunately, very few organizations have that luxury.
Today, there appears to be unprecedented growth in boutique operations in the post production industry. The availability of lower cost equipment, sophisticated communications tools, etc., makes this mode of business quite attractive. Yet, the probability for success for these companies is low, unless the business perspective is present.
The issues, which face many organizations as they grow, are how to grow larger. That may seem a bit incongruous and difficult to identify as the growth spurts are in process. While growing in spurts may be good in some cases, long term there needs to be a plan in place. Period.
The following steps, The Seven Steps Beyond, are designed to help organizations get to the next level. The building blocks incorporated into the Ten Steps to a More Profitable Company must be in place as support for this, the second phase.
- Have a well-defined strategy. It is vital in any organization to have a well-defined strategy, one that will carry the Company a few years down the road. Be sure you understand and are comfortable with how large the Company may grow. Not all companies need to have an aggressive growth strategy. Know where the company is situated versus the competition.
- Know when to make the transition from an entrepreneurship to a professionally managed firm. Know when to bring in support in the form of management to carry the load and to allow each employee, regardless of their job, to do what they do best and what they enjoy the most. Equally important is to understand your own strengths and weaknesses. Entrepreneurs have often been known to say that as their company grew, work stopped being fun.
- Set up control mechanisms – This is not just numbers, i.e.
the monthly financial statements or the ETCs (estimates to complete).
It is a mentality – a mind set – in the Company. Employees should be
accountable and responsible for their actions, qualitatively and quantitatively.
Provide the right tools for the managers, at all levels, to feel that
they can contribute in this regard. Provide feed back at regular intervals.
Feedback should also be bi-directional.
- Follow up and follow through – These two words can help make a difference. Often this can make a difference between success and failure, between getting the work and not. A few years ago, I was asked by a client to recommend an attorney for his new Company. Not wanting to offer only one recommendation, I supplied him with several names. The following week he told me he had made a decision. When asked how he made up his mind he said, "He is the one who returned my calls!"
- Understand the competition – Know where in the marketplace your company fits. Don’t believe all the hype you feed to prospective customers. Consider doing some market research, including independent analysis. You can bet that the competition is looking closely at what you are doing. Take the proactive approach. Do it before it is too late.
- Display leadership qualities – Too often in small - medium sized companies there is no one displaying leadership qualities. Employees often comment about "who is running the ship?" Employees follow by example. The qualities displayed by the "leadership" can pervade the organization. The leadership vacuum can sometimes be solved by merely communicating to the staff the direction in which the company is headed and the manner in which the company does business.
- Differentiate between marketing and sales - These terms have
become synonymous in many people’s minds. They are related, often found
under the direct supervision of the same person, but indeed are different
disciplines.
Marketing is frequently defined broadly as sales promotions, managed communications, product channeling and industry marketing and strategic alliances. A sale is the element that generates cash. Companies need to understand how the product or service will be sold. Determine who will be doing the selling, where they are located, how they are supervised and most importantly, how they are compensated.
Never forget that one of the most important elements is the Executive Sales approach. Company executives must be able to sell the services or at a minimum lead the relationship. Lack of Executive participation in the sales process is certain to hamper long term growth.
Finally, in tough times, do not cut the sales & marketing budget. That is the time to put more effort into those functions.
It need not be a written strategy/business plan, although sometimes the time and effort of getting it written down, both text and financial projections, helps to formalize the plan. In preparing the business plan, include thoughts on each of the key disciplines of an organization. Above all don’t toss the document on the shelf when the work is done. Refer to the plan regularly. The plan is yours, not the banker's, board's or potential investor's.
Work must be fun. Work that is not fun is work and that is no fun!
Consider having an outside board of advisors meet periodically with you as a group. Since these people are not on your regular payroll, you will get the independent thinking that you expect of them. That thinking can be instrumental in a growing organization.
What an easy way to get new business. What a sloppy way to lose business. The market is competitive enough on various other fronts to have lack of follow up and follow through be a factor.
How often have you been the buyer and were disappointed that the seller did not get back to you in a timely manner? Do you do that to your prospective customers? Do your vendors provide you the information you request as and when you want it? Do you respond to your vendors and potential vendors as you want them to respond to you?
Lack of follow up and follow through is fundamental in any organization. In a growing company, it is something that too often falls through the cracks. Those cracks eventually can grow bigger, and are often irreparable.
This is not meant to imply that all sorts of confidential information should be shared. It does imply that there can be a strong sense of satisfaction among employees with some shared information and a sense that their roles are important to the organization.
Getting to the next level is not easy. There are numerous companies who have failed that offer testimony to that. Successful companies do not become successful solely on luck. Successful companies plan and build for success. What is your recipe for success?
